Why does an exchange rate-output combination lying above both DD and AA jump first to AA in equilibrium?
A) Asset prices can adjust immediately.
B) Production plans can adjust immediately.
C) to preserve full employment
D) Prices are nominal and demand is real.
E) Aggregate demand adjusts faster than output.
A
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The capacity utilization rate is the ratio of ________ to ________
A) production; capacity B) capacity; production C) capacity; potential GDP D) none of the above
Most of the countries in the world suffered long and deep losses of output and employment between 1930 and 1935, which in turn meant fewer purchases of U.S. goods and services. Which of the following indicates the appropriate change in the U.S. economy?
A. Aggregate demand shifted to the left B. Aggregate demand shifted to the right C. The economy moved up along the aggregate demand curve D. The economy moved down along the aggregate demand curve
(Consider This) If wages were more downwardly flexible, then we would expect:
A. fewer layoffs during recessions. B. more layoffs during recessions. C. more severe recessions. D. no business cycle fluctuations.
In the long run when a perfectly competitive firm experiences negative economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.