Most economists use the aggregate demand and aggregate supply model primarily to analyze
A. short-run fluctuations in the economy.
B. the effects of macroeconomic policy on the prices of individual goods.
C. productivity and economic growth.
D. None of the above is correct.
Answer: A
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Refer to Figure 18-1. Europe experiences an economic boom. Assuming all else remains constant, this would be represented as a movement from
A) C to B. B) D to A. C) D to C. D) B to A.
Suppose that the value of the short-run absolute elasticity of demand for a good is 0.3. Then, we know the long-run absolute price elasticity of demand will be
A) 0. B) greater than 0.3. C) elastic. D) less than 0.3.
In the long run, monopolistically competitive firms have:
a. excess capacity. b. positive profits. c. minimal average costs. d. homogeneous production.
Assets of the commercial banking system include:
A. reserves and deposits. B. deposits. C. loans and deposits. D. reserves and loans.