Which of the following will most likely occur as the result of an unanticipated increase in aggregate demand that pushes output beyond long-run capacity?
a. an increase in the natural rate of unemployment
b. an increase in the real interest rate
c. a decrease in the real interest rate
d. a decrease in the general level of prices
B
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A trade-off between unemployment and inflation is reflected in the
A) economic stability. B) nonaccelerating inflation rate of unemployment (NAIRU). C) natural rate of unemployment. D) Phillips Curve.
Explain what happens to the long-run supply curve of an industry when firm entry raises the price of inputs used in the industry
What will be an ideal response?
Hold-up problems usually occur when
a. One of the parties makes a heavy investment in equipment specific to its trading partner b. One of the firms decides to invest heavily in general purpose equipment c. Costs are avoidable d. Costs are incurred
The vicious circle of poverty is the trap in which the LDC is too poor to save and therefore it cannot invest and remains poor
a. True b. False Indicate whether the statement is true or false