Which one of the following statements is TRUE?
A. The actual behavior of prices and real GDP during the decade of the 1930s is consistent with a vertical short-run aggregate supply curve.
B. The actual behavior of prices and real GDP during the decade of the 1930s is consistent with the classical model.
C. The actual behavior of prices and real GDP during the decade of the 1930s is consistent with the Keynesian model.
D. The actual behavior of prices and real GDP during the decade of the 1930s is consistent with the idea that increases in aggregate demand will increase the price level but will leave real GDP unchanged.
Answer: C
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Many college football teams require a "donation" in order to purchase season tickets. This is an example of
A) price gouging. B) tie-in sale. C) two-part pricing. D) anti-competitive behavior.
Which of the following statements is true?
A) The motivation to try to explain something is at the heart of building a theory. B) If a theory makes people uncomfortable then it should be discarded or ignored. C) In order for a theory to be valid it must be a perfect description of reality. D) Building a theory and evaluating a theory are the same thing.
The average variable cost of producing 250 sundaes is $5. At this level of output, average variable cost is minimized. Which of the following statements is true?
A. Average fixed cost is minimized at an output less than 250 sundaes. B. Total cost of producing 250 sundaes is $1,250. C. Average total cost is minimized at an output greater than 250 sundaes. D. Marginal cost of the 251st sundae is $1,250.
An increase in taxes will cause
A. AS to increase (move down and to the right). B. AS to decrease (move up and to the left). C. AD to increase (move to the right). D. AD to decrease (move to the left).