If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be
A. downward sloping.
B. horizontal.
C. vertical.
D. upward sloping.
Answer: B
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The change in consumption divided by a change in disposable income is defined as:
a. the marginal propensity to consume. b. autonomous consumption. c. the consumption function. d. Keynes' absolute disposable income hypothesis. e. transitory consumption.
If a particular perfectly competitive industry uses only a small fraction of the supply of any of its inputs, the long run supply curve for that industry will tend to be: a. vertical
b. upward sloping. c. horizontal. d. downward sloping.
Which is NOT true of Globalization
A. it refers to increasing economic and cultural interdependency amongst countries B. it results in the financial ruin of some countries C. it potentially increases economic well-being among all countries involved D. it results in increasing competition, specialization, transmission of ideas.
The SRAS curve is vertical at the natural level of real output
a. True b. False Indicate whether the statement is true or false