When the economy is producing at a quantity greater than its long-run aggregate supply:
A. we are experiencing a recession.
B. the economy is experiencing greater economic growth.
C. it is pushing some of its resources to operate beyond capacity.
D. it causes a bubble to form in one of its major sectors.
Answer: C
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If the consumption function is C = 25 + 0.9y and income increases by $100, then savings will increase by
A) $10. B) $25. C) $90. D) $115.
By the end of the 1960s, many countries felt that they were importing inflation from
A) the United States. B) Germany. C) France. D) Japan. E) the United Kingdom.
When a per unit tax is imposed on the sale of a product of a monopolist, the resulting price increase will
A) always be less than the tax. B) always be more than the tax. C) always be less than if a similar tax were imposed on firms in a competitive market. D) not always be less than the tax.
One reason for the short-run aggregate supply curve (SRAS) is:
A. a fixed CPI market basket. B. perfect knowledge of workers. C. fixed-wage contracts. D. the upward-sloping production function.