Keynesian economists argue that
A) equilibrium real GDP is demand-determined.
B) equilibrium real GDP is supply-determined.
C) equilibrium real GDP can be reached only in a theoretical economy.
D) reaching equilibrium real GDP always results in inflation.
A
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The aggregate supply curve shows the total quantity of output that firms are willing and able to supply at a given inflation rate. This is the same relationship that is shown by the
A) aggregate expenditure curve. B) Phillips curve. C) MP curve. D) IS curve.
Suppose the fixed cost of building a nuclear power plant is $1 billion. Suppose also that the only variable cost is the labor of Homer Simpson, and he earns $10 per hour. If the plant generates 1,000 kilowatts each hour, and has already generated 1 billion kilowatts, what can you say about the marginal cost of the next kilowatt?
a. b and e. b. The marginal cost is equal to $.01. c. The marginal cost is equal to $1.01. d. The marginal cost is rising. e. The marginal cost is falling.
Why has the free-market system produced the most rapid rates of growth of any economic system?
What will be an ideal response?
Lower input prices in large firms might lead to:
A. upward-sloping marginal cost curves. B. upward-sloping short-run average cost curves. C. upward-sloping long-run average cost curves. D. downward-sloping long-run average cost curves.