New Keynesian economists believe that nominal wages and prices respond ________ to shocks, and classical economists believe that nominal wages and prices respond ________ to shocks
A) quickly; quickly
B) quickly; slowly
C) slowly; quickly
D) slowly; slowly
C
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If a new and better good replaced an older and less expensive good, then the price level measured by the CPI ________
A) is lower than the actual price level B) is higher than the actual price level C) might be either higher or lower than the actual price D) is the same as the actual price level because it measures the prices of the actual goods
On the diagram above, show the quantity of consumption per worker in equilibrium
If the actual capital per worker were greater than k*, would consumption be higher or lower than it is in equilibrium? Describe what would happen in an economy with such a high level of capital per worker.
The slope of a line
a. can only be calculated for straight lines b. varies at different points along a straight line c. indicates whether or not there is a causal relationship between variables d. is independent of the units of measurement used e. indicates how much the vertical variable changes for a given change in the horizontal variable
Assume the overall price level changes, ceteris paribus. Considering this, which of the following accurately explains a difference between the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve?
a. There is movement along the SRAS curve but not the LRAS curve. b. The quantity of real GDP supplied changes for the LRAS curve but not for the SRAS curve. c. Both the SRAS curve and the LRAS curve shift. d. The quantity of real GDP supplied changes for the SRAS curve but not for the LRAS curve.