According to new Keynesian economics:
a. the aggregate supply curve is horizontal at relatively low levels of real GDP and becomes negatively sloped, as more and more industries reach their full capacity level of output.
b. the aggregate supply curve is negatively sloped at relatively low levels of real GDP and becomes horizontal, as more and more industries reach their full capacity level of output.
c. the aggregate supply curve is horizontal at relatively low levels of real GDP and becomes positively sloped, as more and more industries reach their full capacity level of output.
d. the aggregate supply curve is positively sloped at relatively low levels of real GDP and becomes horizontal, as more and more industries reach their full capacity level of output.
e. the aggregate supply curve is positively sloped at relatively low levels of real GDP and becomes negatively sloped, as more and more industries reach their full capacity level of output.
c
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If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor, the farmer has
A) increasing returns to scale. B) constant returns to scale. C) decreasing returns to scale. D) no returns to scale.
The characteristics that create a vicious cycle of poverty in less developed countries are
a. low levels of current production and a declining population b. stagnant production, poor infrastructure, and a declining population c. low current output per capita, high population growth rates, and poor infrastructure d. inefficient governments, low current production, and low tax rates e. political instability and low population growth
A PPF is bowed outward as a result of
A) constant opportunity costs. B) increasing opportunity costs. C) decreasing opportunity costs. D) scarcity. E) choice.
As the price of a Giffen good falls, the consumer will
A) purchase more units. B) purchase fewer units. C) not change the amount purchased. D) There is not enough information to answer this question.