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1 of 70
Term
A government decision was made to spend 10 billion dollars on new
technology to combat a serious problem in the country.
What will happen to the aggregate demand curve?
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It will shift to the right It will shift downward
, It will shift to the left It will remain unchanged
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2 of 70
Term
Why is inflation good for borrowers and bad for lenders?
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Because inflation enhances Because inflation reduces the
the purchasing power of value of the money paid back to
lenders lenders
Because inflation makes interest Because inflation increases the value
rates rise of loans
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3 of 70
Term
Which situation occurs for a form in the long run?
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The quantities of all inputs are fixed The availability of inputs is limited
The quantities of all inputs
are variable The price of all inputs is variable
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4 of 70
Term
Why is a firm's total cost in the long run always as low or lower than
in the short run?
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In the long run, a firm can
alter its use of all factors of In the short run, a firm can alter all
production factors of production
In the long run, a firm can only In the long run, a firm is restricted by
adjust labor costs fixed capital
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, 5 of 70
Term
An economy starts in a long run equilibrium and then there is a
negative supply shock.
Which economic outcome will result from this situation?
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Decreased price level and Lower price level and lower
increased employment employment
Higher price level and higher Stable price level and reduced
employment employment
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6 of 70
Term
Which outcome is caused by adverse selection in used car market?
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Only poorly maintained cars Only new cars being available for
being available for sale sale