If the economy experiences a(n) ________, inflation will rise and real GDP will fall
A) negative supply shock B) decrease in aggregate demand
C) increase in short-run aggregate supply D) positive supply shock
A
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Which of the following are reasons that banks are so heavily regulated?
a. Governments are concerned about the safety of deposits. b. The industry is a principal determinant of aggregate demand. c. Bank failures are contagious. d. All of the above are correct.
Which of the following statements is correct?
a. In the long run, both perfectly competitive firms and monopolistically competitive firms operate with excess capacity. b. A firm operates with excess capacity when, in the long run, its level of output is below the efficient scale. c. For any firm, efficient scale is the level of output at which the average-total-cost curve is tangent to the demand curve. d. All of the above are correct.