Long-run aggregate supply curve in the classical model
A) is a downward sloping line.
B) is the level of real GDP corresponding to 100 percent labor force participation.
C) is the level of real GDP corresponding to the natural rate of unemployment.
D) is determined by the capital stock of the economy, not the labor force.
C
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The components of aggregate expenditure that are not influenced by GDP are known as
A) fixed expenditure. B) induced expenditure. C) planned expenditure. D) unplanned expenditure. E) autonomous expenditure.
A presidential candidate once famously said about a particular policy: "I voted for it before I voted against it." How might such a statement make sense in the context of sophisticated voting along agendas.
What will be an ideal response?
If inflation is greater than expected, then the unemployment rate is
a. above the natural rate. In the long run the short-run Phillips curve will shift right. b. above the natural rate. In the long run the short-run Phillips curve will shift left. c. below the natural rate. In the long run the short-run Phillips curve will shift right. d. below the natural rate. In the long run the short-run Phillips curve will shift left.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower