In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that
A) existing capital equipment can be used more intensively.
B) the unemployment rate usually rises dramatically along with the price level.
C) workers can be switched from counted to uncounted production.
D) wage rates rise almost simultaneously with the price level.
A
You might also like to view...
What are the assumptions of a pure monopoly?
What will be an ideal response?
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. A bundle of goods that Country B could potentially make would be:
A. (400 iPods, 2,000 tablets). B. (200 iPods, 1,500 tablets). C. (300 iPods, 450 tablets). D. (400 iPods, 1 tablet).
In order to achieve a high economic freedom rating, a country must:
a. provide secure protection of privately owned property and evenhanded enforcement of contracts. b. refrain from creating barriers that limit domestic and international trade. c. rely more fully on markets rather than governments to allocate goods and resources. d. do all of these.
Which type of funding is very controversial, and is widely criticized for serving the geopolitical needs of donors instead of assisting poor nations?
a. concessionary loans b. microloans c. multilateral aid d. bilateral foreign aid