When the relationship shown in the Phillips curve is put into the aggregate demand curve, the horizontal portion of the aggregate demand curve disappears
Indicate whether the statement is true or false
F
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If the market demand curve does not capture all of the benefits to society of buying an additional unit of good, then:
A. the allocation of resources will be socially optimal. B. the market equilibrium will not be efficient. C. the market equilibrium will be socially optimal. D. the market will not be in equilibrium.
The above figure shows a perfectly competitive firm. If the market price is $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
Television advertisements aired during major sporting events are very expensive. A theory asserting that people buy a product simply because it is advertised would suggest that information on the high cost of advertising
a. enhances the effectiveness of the advertisement. b. reduces people's willingness to purchase advertised products. c. is leaked to discredit the firms that spend so much on advertising. d. reduces the effective staying power of a product.
How much is the output gap if short-run output is $21.0 trillion and potential output is $20.0 trillion?
What will be an ideal response?