Classical economists believe that the aggregate supply curve is vertical because
A. people who are not working are those who have chosen not to work at the prevailing wage rate.
B. the labor market is always in equilibrium.
C. wages are flexible and they always change to clear the labor market.
D. all of the above.
Answer: D
You might also like to view...
Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?
What will be an ideal response?
In the Keynesian model, the most important influence on planned consumption is
a. the interest rate. b. expectations. c. disposable income. d. the price level.
As output increases, a typical firm's unit costs
a. decrease because the firm buys its inputs in large quantities b. increase because the supply of inputs increases c. remain constant d. increase due to the increasing scarcity of resources e. decrease as firms take advantage of diseconomies of scale
The marginal revenue of a monopolist is
A. less than price because a monopolist is a price taker. B. less than price because to sell more output the firm must reduce the price on all units sold. C. above price because the firm is a price setter. D. always equal to price.