A relatively steep aggregate demand curve indicates that
A) velocity is relatively constant.
B) the economy is near full employment.
C) inflation is relatively high.
D) spending is insensitive to changes in the price level.
D
You might also like to view...
The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours of students' labor are unemployed?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) 0 hours
Consider the production possibilities frontier in the figure shown. As more and more cigars are produced the opportunity cost of producing more cigars:
A. decreases.
B. stays the same.
C. increases.
D. decreases then increases.
Answer the following statement(s) true (T) or false (F)
1. An individual supply curve is a graphical representation of the quantity of goods and services that all the individual producers are willing and able to supply at various prices. 2. A shift in the entire supply curve is called a change in quantity supplied. 3. The supply of a good increases if the price of one of its substitutes in production falls. 4. If producers expect a higher price in the future, they will supply less now than they otherwise would have.
Suppose that A Cleaner World invents a new type of laundry detergent that has an ingredient that stops stains from setting into clothes. If the laundry detergent market is monopolistically competitive, explain what will happen to the price of its product in the short run. What will happen in the long run?
What will be an ideal response?