New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order
A) a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real GDP, an upward shift in the short-run aggregate supply curve, and an increase in the price level.
B) a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real GDP, a downward shift in the short-run aggregate supply curve, and a decrease in the price level.
C) an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
D) a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
A
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In the large country case, when a tariff is imposed, the country:
a. sees a terms-of-trade gain. b. is able to reduce world price of the imported good. c. is going to experience an increase in consumer surplus. d. sees a terms-of-trade gain and is able to reduce world price of the imported good.
A welfare loss occurs when a monopolist chooses not to produce units of output that are of greater marginal value to consumers than the marginal cost of producing them
a. True b. False Indicate whether the statement is true or false