In the Keynesian model which includes the Keynesian short-run aggregate supply curve
A) an increase in aggregate demand would causes the price level to rise, but does not change the level of real GDP.
B) an increase in aggregate demand causes real GDP to rise without changing the price level.
C) an increase in aggregate demand changes neither the price level nor the level of real GDP.
D) an increase in aggregate demand causes real GDP and the price level to decrease.
Ques. 2If Target were to merge with Wal-Mart, this would be referred to as a(n)
A) horizontal merger.
B) vertical merger.
C) conglomerate merger.
D) anti-competitive merger.
Ques. 3Suppose a price ceiling is currently set below the equilibrium price. Now suppose that policy makers decide to lower the price ceiling. This reduction in the price ceiling will cause which of the following to occur?
A) The shortage in the market will decrease.
B) The shortage in the market will increase.
C) The surplus in the market will decrease.
D) The surplus in the market will increase.
Ques. 4Which of the following are mentioned as forces of the new growth theory that influence economic growth? I. Technology II. Research III. Innovations
A) I only
B) I and II only
C) I and III only
D) II and III only
E) I, II, and III
Ques. 5Refer to the above table. The market quantity supplied when the price is 6 is
A) 0.
B) 5.
C) 10.
D) 20.
Ques. 6If a country is currently producing inside its production possibilities curve
A) it can increase the production of both goods by putting unemployed resources to work.
B) it can increase the production of one of the goods only if it reduces the production of the other good.
C) it is experiencing efficient production of one good but not the other.
D) None of the above are correct.
Ques. 7In a natural monopoly situation
A) there are large economies of scale relative to demand.
B) the firm has an upward sloping average cost curve.
C) producers try to differentiate their product with advertising.
D) there is no need for government regulation.
Ques. 8The legal system provided by the government is necessary for the smooth working of markets because
A) it keeps criminals off of the streets.
B) it defines and protects property rights.
C) it is set up in the U.S. constitution.
D) it ensures that producers maximize their profits.
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