As the slope of the aggregate supply curve increases, this indicates that

A. the economy is getting close to potential GDP.
B. the economy is reducing employment.
C. inflation will be less of a problem.
D. output is falling.


Answer: A

Economics

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Refer to the accompanying figure. The absolute value of the slope of the demand curve D1 is ________, and the absolute value of the slope of demand curve D2 is ________.

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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

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Economics