If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected.
B. only the long-run aggregate supply curve would shift left.
C. only the short-run aggregate supply curve would shift left.
D. the long-run and short-run aggregate supply curves would both shift left.
Answer: D
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The expenditure multiplier explains how a change in
A) real GDP leads to a change in autonomous expenditure. B) autonomous expenditure leads to a change in real GDP. C) real GDP leads to a change in induced expenditure. D) induced expenditure leads to a change in autonomous expenditure. E) induced expenditure leads to a change in real GDP.
A good salesperson can sell $200,000 worth of goods, while a poor one can sell only a smaller amount worth of goods. Job applicants know if they are good or bad, but the firm does not
A firm will offer job applicants a choice between a fixed salary of $20,000 or a 20% commission. Assume risk-neutral salespersons and no opportunistic behavior. Given that the firm wants to distinguish a prospective good salesperson from a poor one, what should be the sales amount of a poor salesperson? A) more than $150,000 B) less than $100,000 C) more than $100,000 D) $100,000