In the extended aggregate demand-aggregate supply model:
A. long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run
aggregate supply curve.
B. the long-run aggregate supply curve is horizontal.
C. the price level is the same regardless of the location of the aggregate demand curve.
D. long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-
run aggregate supply curve, and the long-run aggregate supply curve.
D. long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-
run aggregate supply curve, and the long-run aggregate supply curve
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Suppose Ariana deposits $75,000 in her bank. If the reserve ratio is 20 percent, this will lead to a maximum increase of ________ in checking account balances throughout all banks
A) $15,000 B) $375,000 C) $750,000 D) $1,500,000
The high-school dropout rate typically declines during a recession because
A) more money flows into the public sector as the flow declines in the private sector. B) teachers become more readily available during a recession. C) the opportunity cost of continuing in school falls in a recession. D) the demand for education rises in a recession. E) the legal school-leaving age is a function of the unemployment rate.
Which of the following accounts for a movement along a given AD curve?
a. The substitution effect b. The tax rate effect c. The real-balance effect d. The foreign aid effect e. The government spending effect
In the short run, a monopolistic competitor can
a. not earn an economic profit because of competition b. use limit pricing to reduce competition c. maximize profits by charging the highest price the market will bear d. earn an economic profit e. maximize profit by selecting the minimum efficient scale