Which of the following statements is incorrect?
A. The point where the short-run and long-run supply curves intersect corresponds to the potential level of output.
B. Inflation and output are unrelated in the long run.
C. Any point on the short-run aggregate supply curve reflects current inflation equals target inflation.
D. In the long run, inflation is determined by monetary policy.
Answer: C
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When the federal funds rate equals the interest rate paid on excess reserves
A) the supply curve of reserves is vertical. B) the supply curve of reserves is horizontal. C) the demand curve for reserves is vertical. D) the demand curve for reserves is horizontal.
Refer to Figure 8.2. At P = $80, how much is profit in the short run?
A) $88 B) $306 C) $351 D) $1000 E) $1024
The central bank is said to monetize the deficit when it purchases bonds issued by the government.
Answer the following statement true (T) or false (F)
If the United States were to permit importation of lower cost pharmaceuticals from abroad, should this importation apply to all foreign countries or a limited number? If a limited number, which should they be and why?
What will be an ideal response?