Economists who argue that the AS curve is vertical in the long run at potential GDP also argue that the Phillips curve in the long run is
A. horizontal at the natural rate of inflation.
B. downward sloping.
C. upward sloping.
D. vertical at the natural rate of unemployment.
Answer: D
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Potential GDP measures the capacity of the economy in terms of the actual goods and services to be produced
Indicate whether the statement is true or false
Which of the following would cause the money demand curve to shift to the left?
A. An increase in interest rates B. Inflation C. A technological advance, like online shopping D. An increase in GDP
If the economy is in recession and the number of used baby clothing stores increases, then used baby clothes
a. are a necessity b. are an inferior good c. are a normal good d. are a luxury e. have price-elastic demand
The change in saving divided by the change in income is the:
A. marginal propensity to save. B. saving function. C. average propensity to save. D. extra propensity to save.