In an economy where nominal incomes adjust equally to changes in the price level, we would expect the long-run aggregate supply curve to be:
a. vertical.
b. negatively sloped.
c. positively sloped.
d. horizontal.
a
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The largest amount of state and local spending is spent on highways and other roads
a. True b. False
Which of the following is the correct formula for the marginal propensity to consume?
A. MPC = 1 ÷ (1 - MP B. MPC = (total consumption) ÷ (total disposable income). C. MPC = 1 - MPS. D. MPC = (change in consumption) + (change in disposable income).
The unemployment rate is the percentage of people in the labor force who are both able to and looking for work but who cannot find jobs.
Answer the following statement true (T) or false (F)
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher