According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when
A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not.
B) there are no unemployed resources and wages do not change when prices change.
C) there are unemployed resources and prices do not fall when aggregate demand falls.
D) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.
C
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What are the three principles of equity applied to taxation in the text?
What will be an ideal response?
Which of the following statements most likely describes what occurred in this economy?
a. Stagflation resulted from the decrease in price levels coupled with lower output.
b. An inflationary gap resulted due to the shift from RGDPNR to RGDP2.
c. Output decreased and unemployment increased.
d. An increase in consumer confidence shifted AD1 to AD2.
The level of equilibrium expenditure at each price level determines
A) full employment. B) the points on the AE curve. C) the points on the AD curve. D) aggregate planned production. E) the price level.
A principal cause of the business cycle is the changes in total spending that occur in the overall economy
a. True b. False Indicate whether the statement is true or false