If firms maintain preset prices in the short run, then the primary cause of output gaps is changes in:
A. potential output.
B. economy-wide spending.
C. prices.
D. capital and technology.
Answer: B
You might also like to view...
Everything else held constant, an autonomous monetary policy easing ________ aggregate ________
A) increases; demand B) decreases; demand C) decreases; supply D) increases; supply
Which of the following is not a leading variable?
A) Inflation B) Stock prices C) Average labor productivity D) Residential investment
Which of the following statements is most accurate about fiscal policy since the end of the Great Recession?
A. Cyclically adjusted deficits that occurred in 2009 eventually gave way to cyclically adjusted surpluses as the economy recovered. B. The cyclically adjusted budget remained in deficit, but those deficits became smaller from 2009 to 2015, so fiscal policy became contractionary. C. The cyclically adjusted budget remained in deficit and those deficits became smaller from 2009 to 2015, but fiscal policy remained expansionary. D. Cyclically adjusted deficits rose steadily from 2009 to 2015, so fiscal policy became increasingly expansionary.
The price of labor in the agricultural industry has just increased. For agricultural products, this will lead to
A) an increase in price and a decrease in quantity. B) an increase in price and an increase in quantity. C) a decrease in price and a decrease in quantity. D) a decrease in price and an increase in quantity.