Draw an aggregate supply and aggregate demand graph which shows the economy producing an output which exceeds potential output in the short run, and the adjustment that will occur as the economy adjusts to long-run equilibrium
What will be an ideal response?
In the short run, the economy is at the intersection of AD and AS0, with an output of y0. In the long run, aggregate supply will decrease, shifting up from AS0 to AS1, and the equilibrium output will fall from y0 to yp, at the intersection of AD, AS1, and Long-run AS.
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A. only if the share of the population employed decreases. B. if the share of population employed and/or average labor productivity increases. C. only if average labor productivity increases. D. only if the share of the population employed increases.
Jamal earns $160,000 per year and Josephina earns $80,000 per year. They both pay the same price to buy the identical automobile and each pays $1,600 in sales tax. In relation to their relative incomes, this is an example of a
A) regressive tax. B) progressive tax. C) proportional tax. D) marginal tax.
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a. floppy disks b. typists c. computer terminals d. electricity e. paper
In the 1970s, _____
a. the market interest rate increased above the rate that banks could offer b. banks and thrifts were able to borrow at low interest rates to support outstanding loans c. the market interest rate decreased below the rate that banks could offer d. banks and thrifts were forced to call in outstanding loans e. banks and thrifts were bailed out by the FDIC