Sticky wages cause the:
A. short-run aggregate supply curve to slope upward.
B. long-run aggregate supply curve to slope upward.
C. short-run aggregate supply curve to slope downward.
D. long-run aggregate supply curve to slope downward.
Answer: A
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If the production of a good causes an external cost, then the efficient quantity is
A) equal to the quantity at which the marginal benefit equals marginal cost. B) less than the quantity at which the marginal benefit equals the marginal cost. C) more than the quantity at which the marginal benefit equals the marginal cost. D) the quantity at which the marginal private benefit is greater than the marginal social benefit. E) None of the above answers is correct.
If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10, the law of demand predicts
A) more studying on Saturday and less on Tuesday. B) more studying on Tuesday and less on Saturday. C) the same amount of studying on Tuesday and Saturday. D) no studying on Tuesday or Saturday.
When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve
A) total planned real expenditure will be lower than actual real GDP, and the price level will increase. B) there will be no price level change. C) there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves. D) total planned real expenditures will exceed actual real GDP, and the price level will increase.
The law of comparative advantage indicates that if a group of individuals wants to maximize their joint output, then each good should be supplied by
a. the person with the lowest wage rate. b. the low opportunity cost producer. c. the person with the most advanced technical knowledge. d. the person that can accomplish the task most rapidly.