A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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When some argue there is no "race to the bottom" today but instead a "race to the top," they are referring to
a. states doing whatever it takes to develop their economies and lead the world. b. people around the world being increasingly motivated by greed and profit. c. societies competing through technological skills and knowledge rather than low wages. d. nongovernmental actors overtaking the traditional powers and responsibilities of states.
All of the following are problems associated with maintaining a cartel except that:
a. cartels are illegal. b. a large amount of information is needed to coordinate a cartel. c. profits are not maximized by a cartel so it will evolve into a monopoly. d. each member of the cartel has an incentive to "chisel" by expanding output.