If there is an expansionary gap in the short run, the adjustment to the long-run equilibrium involves expansion of aggregate demand
Indicate whether the statement is true or false
false
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In using the composite-good convention in an indifference curve diagram, economists
a. compare the prices of market baskets at different points in time. b. divide the world's production into two classes, goods and services. c. divide the world's goods into two classes, high quality goods and low quality goods. d. lump together all goods but one into a single good measured in a single unit, like dollars.
Define the concept used in economics known as Ockham's Razor
What will be an ideal response?
An effective rent control will
A) lead to a surplus of housing units. B) keep rents below the competitive market level. C) keep rents above the competitive market level. D) be set at the price where quantity supplied equals quantity demanded.
In the long run, countries with higher rates of money growth usually have:
A. smaller budget deficits. B. faster growth rates of real output. C. lower rates of inflation. D. higher rates of inflation.