In the short run, the price level
a. will decrease if unit costs and markups both increase throughout the economy
b. will remain stable if unit costs increase throughout the economy
c. is unimportant in macroeconomics
d. will increase if unit costs increase throughout the economy
e. is determined by the Fed
D
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Refer to Figure 4.2. The dominant strategy for Sloane is to
A) go to the movie theater. B) go to the bowling alley. C) go to either the movie theater or to the bowling alley. D) Sloane does not have a dominant strategy.
A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a horizontal line. From this fact we know that
A) the value of x never changes. B) the value of y does not depend on the value of x. C) the ratio of x to y is constant. D) the slope of the line is not defined because y never changes.
Along the aggregate supply curve
A) the horizontal part represents a situation where the economy is operating above full employment levels. B) inflation would be a primary concern along the horizontal part of the aggregate supply curve. C) idle resources, such as labor and capital, would be a feature of the vertical section of the aggregate supply curve. D) the horizontal section of the aggregate supply curve represents the limit of production. E) the middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.
A market basket:
A. is a tool devised to track how changing prices affect consumers. B. includes all the goods and services produced in an economy. C. includes all the goods and services consumed in an economy, including imports. D. includes all the goods and services consumed in an economy, including net exports.