The strength of the movement in the short-run aggregate supply schedule, in response to an aggregate demand shock is determined by ________
A) the price elasticity of demand
B) the credibility of the monetary authorities
C) the underlying state of the economy
D) the choice of nominal anchors
B
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A trade-off between aggregate output and inflation
A) is theoretically possible, but has never been observed in practice. B) may exist in the short run, but not in the long run. C) may exist in the long run, but not in the short run. D) exists in both the short run and the long run.
Market supply is obtained by
A) summing the amount demanded by individual consumers at various prices. B) summing the amount supplied by individual producers at various prices. C) the law of supply. D) observing how the supply curve shifts.
If MUx / Px = MUY / PY, then _____
a. the consumer should purchase the same quantity of X and Y b. the consumer should purchase less of X c. the consumer is maximizing utility d. the consumer should purchase more of Y e. the consumer is minimizing utility
The problem in many middle- and low-income economies around the world is very high __________, which generally arises from huge budget deficits that are financed by the government printing its domestic currency.
a. inflation b. unemployment c. taxes d. leverage