Under private enterprise, production is guided by _____________________________.
Fill in the blank(s) with the appropriate word(s).
the price mechanism
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be
A. downward sloping. B. horizontal. C. vertical. D. upward sloping.
Refer to the information provided in Figure 23.9 below to answer the question(s) that follow.
Figure 23.9Refer to Figure 23.9. At aggregate output level $300 million, there is a
A. $75 million unplanned decrease in inventories. B. $100 million decrease in inventories. C. $100 million increase in inventories. D. $75 million unplanned increase in inventories.
A rightward shift of the entire demand curve
A. might be due to a decline in income if it is a normal good. B. might be due to an increase in income if it is an inferior good. C. might be due to a tax increase on the product. D. might be due to an increase in population.