For movements along the long-run aggregate supply curve
A) potential GDP is dependent on the price level.
B) the prices of goods and services change while the prices of productive resources hold steady.
C) the price level and the money wage rate change by the same percentage.
D) All of the above are correct.
C
You might also like to view...
Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
How does rapid price adjustment, as assumed in classical models, result in separation of real from nominal variables (the classical dichotomy)?
What will be an ideal response?
When no economic growth occurs in an economy, the growth rate trend line is horizontal
Indicate whether the statement is true or false
Which of the following countries had double-digit inflation for most of the years from 2000 to 2010?
a. India b. Iran c. Italy d. Iraq