Assuming prices and wages are fully flexible, the aggregate supply curve will be:
a. upward sloping, but not vertical.
b. vertical.
c. horizontal.
d. downward sloping.
b
You might also like to view...
Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to
A) 0.8. B) 1.8. C) 1.1. D) 0.9.
If nominal gross domestic product fell while real gross domestic product rose, which of the following must be true?
a) unemployment increased b) the inflation rate was negative c) net exports were negative d) the average of stock prices rose while bond prices fell e) nominal interest rates by less than the rate of inflation
Suppose the economy is initially at equilibrium, in which total planned real expenditures equals real GDP. Which of the following will occur if there is an increase in autonomous investment?
A. Inventories will not change and production of goods and services will not change either. B. Inventories will decrease immediately and production of goods and services will increase until real GDP catches up with total planned real expenditures. C. Both inventories and production of goods and services will increase. D. Inventories will increase immediately and production of goods and services will decrease until real GDP catches up with total planned real expenditures.
Briefly describe at least three of the arguments for protectionism mentioned in your textbook.
What will be an ideal response?