What is the natural level of output?
It is the level of output in the long run where aggregate supply is vertical with respect to changes in the price level. This position is determined by the natural level of output, which reflects the levels of capital, land, labor, and technology in the economy.
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The supply of dollars in the foreign exchange market decreases and that means that the supply curve of dollars shifts leftward if
A) the U.S. interest rate differential decreases. B) the expected future exchange rate rises. C) the exchange rate for the dollar rises. D) the U.S. interest rate decreases.
A decrease in the tax rate will ________ the disposable income of households and ________ the size of the multiplier effect
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase E) increase; not change
Suppose the typical consumer only purchases food and clothing, and her utility can be expressed as U = F ? C. Currently, food costs $5 per unit and clothing costs $2 per unit. Her income is $70
If the price of food increases to $6, compare the resulting Laspeyres price index with a true cost of living index.
If the price elasticity of demand for U.S. automobiles is higher in Europe than it is in the United States, and transport costs are zero, a price-discriminating monopolist would charge
A) the same price for autos in the United States as in Europe. B) a lower price for autos in the United States than in Europe. C) a higher price for autos in the United States than in Europe. D) a less profitable price for autos in the United States than in Europe.