Long-run equilibrium occurs when which of the following occur?
a. the actual price level equals the expected price level
b. real GDP supplied equals potential output
c. real GDP supplied equals real GDP demanded
d. all of the above must occur to reach long-run equilibrium
d
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The regulatory agency that sets reserve requirements for all banks is
A) the Federal Reserve System. B) the Federal Deposit Insurance Corporation. C) the Office of Thrift Supervision. D) the Securities and Exchange Commission.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Suppose that inventories were $40 billion in 2007 and $50 billion in 2008. In 2008, accountants would:
a) add $10 billion to other elements of investment in calculating total investment. b) subtract $10 billion from other elements of investments in calculating total investment. c) add $45 billion (= $90/2) to other elements of investment in calculating total investment. d) subtract $45 billion (= $90/2) from other elements of investment in calculating total investment.
In order to prove that Dr. Pepper and 7-Up are substitutes, economists should test the ____ and get a ____.
A. price elasticity of demand; number less than 1 B. income elasticity; positive number C. cross-price elasticity; positive number D. price elasticity of demand; number greater than 1