Which of the following would shift the supply curve for a good to the left?
a. an increase in the price of that good
b. a decrease in the price of an alternative good
c. an improvement in technology for producing that good
d. an increase in the cost of an important resource used to make that good
e. an increase in the number of producers
D
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In the short run, even if a monopoly's total revenue does not cover its variable costs, it should continue to produce because ultimately in the long run, the monopoly will start earning profits
Indicate whether the statement is true or false
Which of the following is false?
a. Rational expectations theory suggests that government economic policies designed to alter aggregate demand to meet macroeconomic goals are of very limited effectiveness, because when policy targets become public, people will alter their own behavior from what it would otherwise have been, and in so doing, they largely negate the intended impact of policy changes. b. If changes in inflation surprise people, they will have little effect on unemployment or real output in the short run. c. An unanticipated increase in AD as a result of an expansionary monetary policy stimulates real output and employment in the short run, but an anticipated increase in AD does not. d. Unanticipated increases in AD expands output and employment in the short run, but only increases the price level in the long run.