Explain the relationship of the long-run aggregate supply curve, the short-run aggregate supply curve and the aggregate demand curve in determining a long-run and short-run macroeconomic equilibrium
What will be an ideal response?
Short-run macroeconomic equilibrium occurs when the quantity of GDP demanded equals the quantity supplied, which is where the AD and SAS curves intersect. The short-run equilibrium does not necessarily take place at full employment. The long-run macroeconomic equilibrium occurs when real GDP equals potential GDP. This means that the economy is on the LAS curve, where the AD and SAS curves both intersect the LAS curve.
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There are only increases in total surplus when a country exports a good, since more units of the country's output of that good are produced
a. True b. False Indicate whether the statement is true or false
Nancy paid a tax of $0.50 on the last dollar she earned in 1999 . Nancy's marginal tax rate in 1999 was
a. more than 50 percent. b. exactly 50 percent. c. higher than her average tax rate. d. lower than her average tax rate.
Price discrimination requires:
A. a firm to be a competitive firm. B. a firm to be able to segment its customers based on different price elasticities of demand. C. arbitrage. D. that the product can be easily resold.
When per-unit output costs fall as output increases, this is called:
A. economies of scope. B. economies of scale. C. learning by doing. D. diminishing marginal returns.