A vertical long-run aggregate supply curve indicates that
a. an increase in the price level will not expand an economy's output capacity in the long run.
b. outputs greater than the long-run supply constraint cannot be achieved.
c. an increase in the price level will permit the economy to achieve a higher level of output.
d. an increase in the price level will promote technological change and more rapid economic growth.
A
You might also like to view...
Which of the following statements is true about the income elasticity of demand?
A) The income elasticity of demand for normal goods is always zero. B) The income elasticity of demand for inferior goods is always zero. C) The income elasticity of demand for normal goods is always positive. D) The income elasticity of demand for inferior goods is always positive.
Of the following high-income countries, which has the lowest number of MRI units per 1 million population?
A) Canada B) Japan C) the United Kingdom D) the United States
If MPC = 0.9, equilibrium real GDP is $1,000 . and full-employment real GDP is $2,000 . then how much should government spending change to bring about full employment?
a. +1,000. b. ?100. c. +900. d. +100. e. ?0.9.
Which of the following statements is true?
a. Above the optimal tax rate, a reduction in tax rates along the downward-sloping portion of the Laffer curve would increase tax revenues. b. According to supply-side fiscal policy, lower tax rates would shift the aggregate demand curve to the right, expanding the economy and creating some inflation. c. The presence of the automatic stabilizers tends to destabilize the economy. d. To combat inflation, Keynesians recommend lower taxes and greater government spending.