A shift from LRAS1 to LRAS2 in Figure 17.6 indicates that
A. The price level has increased.
B. The capacity of the economy has increased.
C. LRAS has decreased.
D. Aggregate demand has decreased.
Answer: B
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Suppose that the absolute price elasticity for cookies equals 0.8. We could then say that the demand for cookies is
A. perfectly elastic. B. inelastic. C. unit-elastic. D. elastic.
Employers will bear the full burden of the payroll tax if labor supply is
A. perfectly inelastic. B. upward sloping. C. backward bending. D. perfectly elastic.
If total private-sector employment increased from 15,000 in March to 15,750 in April, then we know for sure that
A) the private sector created 750 jobs during that time frame. B) the unemployment rate deceased during that time frame. C) the change in private-sector employment was 750 during that time frame. D) All of the above answers are correct interpretations of the information.
The income effect of higher wages leads workers to want to work more
a. True b. False Indicate whether the statement is true or false