When the level of aggregate production is less than the potential output level, this implies that unemployment is high. Jobs are scarce and workers are abundant, which causes nominal wages to fall over time. The SRAS will shift to the left, moving the short run level of aggregate production closer to the potential output level.
Indicate whether the statement is true or false.
Ans: False.
The SRAS will shift to the right over time, moving the short run level of aggregate production closer to the potential output level.
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The following government policies will help achieve faster economic growth EXCEPT
A) establishing and protecting property rights. B) improving the quality of education. C) discouraging saving and encouraging spending. D) encouraging research and development. E) increasing saving.
Reducing present pollution levels to zero: a. would decrease society's welfare. b. is the ultimate goal of policy makers. c. would be socially optimum
d. would increase deadweight loss.
Cars produced by General Motors in Mexico would be included in U.S. Gross domestic product.
Answer the following statement true (T) or false (F)
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, a decrease in unemployment may be represented by the movement from
A. B to A. B. C to D. C. B to D. D. A to C.