The short-run aggregate supply curve is likely to shift to the left when there is an increase in
A) the cost of productive resources
B) productivity
C) the money supply
D) the federal budget deficit
E) imports
Ans: A) the cost of productive resources
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If there are increasing returns to scale, then it makes sense to consolidate operations into one production facility
A) if production above domestic demand can be exported. B) only if the consolidation creates an absolute advantage versus other trading partners. C) if the government subsidizes production. D) Never, because then you lose the possibility of comparative advantage gains between the production facilities.
A single currency area requires
A) mobile labor and synchronized business cycles. B) immobile labor and synchronized business cycles. C) immobile labor and mobile capital. D) mobile labor and unsynchronized business cycles.