Which of the following is true in the long run?
a. The aggregate demand curve determines the level of potential output
b. The long-run aggregate supply curve is horizontal.
c. The actual price level and the expected price level are equal.
d. Cyclical unemployment is between 5 percent and 6 percent.
e. The price level is determined entirely by the long-run aggregate supply curve.
c
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Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) consumer surplus equals area(s)
A. A + B + C. B. E + F. C. A + B. D. A.
To an economist, "investment" in the GDP accounts means purchases of new final goods and services by firms
Indicate whether the statement is true or false
The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. Based on marginal productivity theory and assuming these markets are competitive, this salary differential indicates that:
A. the president of the United States contributed much more to society than did Derek Jeter. B. the salary differential between Derek Jeter and the president of the United States indicated that their marginal productivities cannot be compared. C. Derek Jeter contributed much more to society than did the president of the United States. D. Derek Jeter and the president of the United States made equal contributions to society.
"To each exactly the same" refers to
A) the productivity standard. B) the free market doctrine. C) the egalitarian principle. D) the ceteris paribus assumption.