Which of the following would cause prices to rise and real GDP to fall in the short run?
a. an increase in the expected price level.
b. an increase in the capital stock.
c. an increase in the money supply.
d. an increase in taxes.
a
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When a firm operates with excess capacity,
a. additional production would lower the average total cost. b. additional production would increase the average total cost. c. it must be a perfectly competitive firm. d. it must be a monopolistically competitive firm.
Refer to the information provided in Figure 26.6 below to answer the question(s) that follow.
Figure 26.6Refer to Figure 26.6. Suppose the equilibrium output is initially $600 billion. An oil embargo would probably
A. decrease both the equilibrium output and the price level. B. decrease the equilibrium output and increase the price level. C. increase the equilibrium output and decrease the price level. D. increase both the equilibrium output and the price level.