According to economists, the fixed-price model of macroeconomic equilibrium depicts the modern economy most closely because it assumes that aggregate supply is independent of price
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic. If the federal government eliminated the 18.4 cents per gallon gasoline tax, the price paid by buyers would
A) decrease by less than 18.4 cents. B) decrease by 18.4 cents. C) decrease by more than 18.4 cents. D) stay the same. E) increase by 18.4 cents.
Between 1870 and 1920, the total labor force increased by threefold while
(a) the total number of people employed in agriculture increased by almost twofold and the total number of people employed in manufacturing and other non- agriculture increased fivefold. (b) the total number of people employed in agriculture increased by almost fivefold and the total number of people employed in manufacturing and other non- agriculture increased by threefold. (c) the total number of people employed in agriculture increased and the total number of people employed in manufacturing and other non- agriculture increased by threefold. (d) the total number of people employed in manufacturing and other non- agriculture increased fivefold while agriculture decreased by twofold.
The quantity of real GDP supplied decreases if the price level ________ because it ________ profits
A) falls; decreases B) rises; increases C) rises; decreases D) falls; increases E) None of the above answers is correct because the AS curve is vertical so that the quantity of real GDP supplied does not change when the price level changes.
Suppose Carmen buys ramen noodles. To determine whether ramen noodles are a normal or inferior good for her, we must observe how Carmen
A) responds to a change in the price of a substitute for ramen noodles. B) responds to a change in the price of a complement for ramen noodles. C) responds to a change in the price of ramen noodles itself. D) responds to a change in her income. E) responds to all of the above.