As firms raise output in response to rising aggregate demand,
a) resources become scarce, wages eventually rise, and a point is reached beyond which output cannot expand
b) they become increasingly efficient and are thus able to pass the cost savings on to consumers in the form of lower prices
c) real wages fall, interest rates rise, and consumers buy less
d) they hire fewer workers and substitute capital for labor
e) the level of nominal GDP falls, though real GDP rises
a) resources become scarce, wages eventually rise, and a point is reached beyond which output cannot expand
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A market equilibrium:
A. leaves unexploited opportunities for individuals. B. exploits all gains achievable through collective action. C. leaves no unexploited opportunities for individuals. D. maximizes total economic surplus.
What is called for with heterodox stabilization policies?
What will be an ideal response?
Deficit financing tends to change the mix of output in the direction of more
A. Business sector goods. B. Public sector goods. C. International sector goods. D. Private sector goods.
If a price ceiling were established above the equilibrium price,
A) it would have no effect on the quantity demanded. B) it would create a shortage. C) it would create a surplus. D) none of the above.