Refer to the above figure. Suppose the original long-run equilibrium was at point B. What could have caused the move to the current equilibrium?
A) Aggregate demand must have decreased.
B) Input prices must have increased, causing long-run aggregate supply to increase.
C) Decreases in the price level caused short-run aggregate supply to fall.
D) A temporary reduction in production due to bad weather.
A
Economics
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One of the strongest reasons that oligopolies exist is due to
A) the homogeneity of their products. B) marginal cost pricing. C) lowest cost production. D) economies of scale.
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Economics