What is the underlying assumption of the original, simplified Keynesian model?
A. The relevant range of the aggregate supply curve (AS) is vertical.
B. The relevant range of the short-run aggregate supply curve (SRAS) is horizontal.
C. The relevant range of the long-run aggregate supply curve (LRAS) is horizontal.
D. The relevant range of the short-run aggregate supply curve (SRAS) is vertical.
Answer: B
You might also like to view...
According to Ricardo's explanation of land rent, what happens when the demand for land increases?
A) The supply curve shifts to the right just enough to keep the price per acre constant. B) Revenues to owners of land increase but economic rent declines. C) The amount of economic rent stays constant, constrained by a perfectly inelastic supply curve. D) Both revenues to owners of land and economic rent increase.
Which of the following countries can reduce youth unemployment by adjusting its labor laws?
a. South Africa b. Spain c. India d. Greece
Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: Name of CompanyRevenuesCost of Purchased inputsCitrus Growers Inc.$0.750Florida Jam Company$2.00$.75The Corner Store$2.50$2.00If the oranges were grown and the jam produced in the year 2015, but the marmalade was sold at The Corner Store in the year 2016, what is the contribution of these transactions to GDP in the year 2016?
A. $0.00 B. $0.50 C. $2.50 D. $2.00
What is the most powerful argument against a fixed exchange rate?
A) The nation must administer the rates at all currency exchange venues, and it is expensive to do. B) The nation usually gets opposition from other trading partners who are excluded. C) The nation has to have a large store of gold on hand to exchange at fixed rates. D) The nation gives up its ability to control its money supply and affect its own interest rates.