The long-run aggregate supply curve represents:
A. potential output in the economy.
B. a production function for the entire economy.
C. the level of output possible if the economy is operating at full capacity.
D. All of these are true.
Answer: D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
What are the three functions that banks perform as financial intermediaries?
What will be an ideal response?
As the price of milk increases, producers are normally willing to supply greater quantities. This response is known as the law of
a. supply b. demand c. averages d. variable proportions e. increasing costs
If there is imperfect competition in the product market, the marginal revenue product of a factor will be greater than the value of its marginal product
a. True b. False Indicate whether the statement is true or false