The short-run aggregate supply curve
A. shows the relationship between aggregate production and the price level holding constant potential GDP and all resource prices .
B. shows a negative relationship between the price level and real national income holding constant potential GDP and all resource prices.
c. shows what each producer is willing and able to produce at each level of income holding constant potential GDP and all resource prices.
d. becomes vertical if there is excess production capacity within the economy.
Ans: A. shows the relationship between aggregate production and the price level holding constant potential GDP and all resource prices.
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When a society achieves production efficiency, it is
A) definitely producing at a point on its PPF. B) perhaps producing at a point on its PPF and perhaps producing at a point inside its PPF. C) definitely producing that combination of goods and services that society values most highly. D) not fully employing all of its available resources to produce goods and services. E) enjoying a free lunch.
When the anticipated rate of inflation is 5 percent and the real rate of interest is 4 percent, the nominal rate of interest is
A) 1 percent. B) 4 percent. C) 5 percent. D) 9 percent.
Roundabout production occurs when
a. entrepreneurs hire others to work for them, rather than taking the time to produce things themselves b. workers avoid intermediary entrepreneurs and cooperate to produce output themselves c. inefficient technology is used d. producers make capital goods instead of consumption goods e. a company takes time to market shares in the company
If the demand for dollars in the market for foreign-currency exchange shifts right, then the exchange rate
a. rises and the quantity of dollars exchanged rises. b. rises and the quantity of dollars exchanged does not change. c. falls and the quantity of dollars exchanged falls. d. falls and the quantity of dollars exchanged does not change.