An increase in potential GDP ________ aggregate supply and ________
A) decreases; shifts the AS curve rightward
B) increases; shifts the AS curve rightward
C) decreases; shifts the AS curve leftward
D) increases; shifts the AS curve leftward
E) has no effect on; does not shift the AS curve
B
You might also like to view...
Assume that firms A and B have the same minimum efficient scale of operation and, at current production levels, both firms are incurring the same average costs of production. However, firm A's output is 5 times larger than firm B's output
How is this possible?
One factor which did not influence the levels of real output and employment in the classical system was the
a. stock of capital. b. level of technology. c. the price level. d. size of the labor force.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases B. remains constant. C. initially increases, then decreases. D. decreases.
The short-run aggregate supply curve (in the absence of misperceptions)
A. slopes downward. B. is horizontal. C. is vertical. D. slopes upward.