If most shocks to the economy are ________ shocks, then ________
A) aggregate demand; inflation stabilization policy will also stabilize activity in the short-run
B) permanent aggregate supply; inflation stabilization policy will also stabilize activity in the short-run
C) temporary aggregate supply; inflation stabilization policy has no impact on economic activity in the long-run
D) all of the above
E) none of the above
D
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Refer to the following graph. An increase in demand is reflected as
a. a shift of the demand curve from D to D1.
b. a shift of the demand curve from D to D2.
c. movement from point A to B along demand curve D.
d. movement from point A to E when the price is $12.50.
The long-run Phillips curve is a vertical line at the natural rate of unemployment
a. True b. False Indicate whether the statement is true or false
If at a particular price level, real output from producers is greater than real output desired by purchasers, then there will be a general ________.
A. shortage and the price level will fall B. shortage and the price level will rise C. surplus and the price level will fall D. surplus and the price level will rise
If the marginal factor cost of hiring an additional worker is $10 while the marginal revenue product is $15, then the firm should
A. hire more workers. B. fire some workers. C. stop hiring more workers. D. none of these: insufficient information to answer the question.