Which of the following statements is true?
A) An increase in potential GDP increases aggregate supply and shifts the AS curve leftward.
B) A decrease in potential GDP decreases aggregate supply and shifts the AS curve leftward.
C) An increase in the money wage rate shifts the AS curve rightward.
D) A fall in the price level shifts the AS curve leftward.
E) An increase in the money wage rate increases potential GDP.
B
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Adjustments in ________ take the economy from the short-run equilibrium to the long-run equilibrium
A) imports and exports B) wages and prices C) the multiplier D) interest rates
The lower the level of income in a country, the
A) less income elastic is the demand for food. B) more income elastic is the demand for food. C) more negative the income elasticity of the demand for food. D) Both answers A and C are correct. E) None of the above is correct.
The directive of prompt corrective action means that
A) the FDIC will intervene earlier and more vigorously when a bank gets into trouble. B) the banks must take actions quickly to resolve reserve disputes. C) bank failures cannot occur. D) there must be an immediate response to an increase in interest rates.
Suppose the representative firm suddenly has less capital at its disposal. What happens to labor demand?
A) It increases. B) It stays the same. C) It decreases. D) We cannot tell.