Compare and contrast the shapes of the short-run and long-run Phillips curves
The short-run Phillips curve is downward sloping, showing that attempting to reduce unemployment carries a price: higher inflation. The short-run curve traces out points as aggregate demand shifts and intersects aggregate supply at different points. An increase in AD results in lower unemployment but higher inflation. The long-run Phillips curve is vertical, implying that the economy tends toward full employment regardless of the price level. The long-run curve reflects built-in stability of the economy. Taking the case of an increase in AD, the higher price level leads to higher wages, thus decreasing short-run AS. The long-term effect of an increase in AD is a higher price level associated with the natural rate of unemployment.
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Many developing countries were once under colonial rule, a system of government that:?
Electric power utility companies use various fuel sources (e.g., coal, natural gas, nuclear) to generate electricity for their customers
What happens to the demand for natural gas used to generate electricity as we move from a short-run planning horizon to a long-run planning horizon? Why? A) Demand becomes more inelastic over time because the other fuel sources become more scarce, so there are fewer options available for electric power utilities in the long run. B) Demand becomes more inelastic over time because all of the power generation plants tend to choose the same technology, which makes the industry less responsive to prices in the long run. C) Demand becomes more elastic over time because the electric plant's technology becomes obsolete, and the power company has less flexibility to adjust to changes. D) Demand becomes more elastic over time because the power companies have more options available and can adopt new generating technologies or substitutes for natural gas over the long run.
The goal of expansionary fiscal policy is to shift the _________ curve to the _________
Fill in the blank(s) with the appropriate word(s).
Recall the Application about the merger of Office Depot and Office Max to answer the following question(s).Recall the Application. Which of the following represent increased competition in the office supplies market?
A. general superstores like Wal-Mart and Target B. membership warehouse clubs like Costco and Sam's Club C. internet retailers like Amazon D. All of these