Because the price level does not affect the long-run determinants of real GDP, the long-run aggregate-supply curve is upward-sloping.
a. true
b. false
Ans: b. false
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If the economy is on the IS curve, but is to the left of the LM curve, aggregate output will ________ and the interest rate will ________
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Dissaving occurs when the consumption function lies below the 45-degree line
a. True b. False Indicate whether the statement is true or false
Monetarists can be described as a group of macroeconomists who
A) emphasize the importance of the federal government's involvement in the economy to dampen the harmful effects of the business cycle. B) emphasize the importance of the money supply as a determinant of macroeconomic activity. C) tend to view government spending and taxation policy as the chief means of stabilizing the economy. D) feel that money should not be created in the private banking system, but only by government.
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $24. How many hours should Joe stay open?
A. 3 hours B. 4 hours C. 5 hours D. 6 hours