If there was a significant find of natural gas in a readily accessible location in the U.S., this would likely
A. decrease aggregate demand.
B. increase aggregate demand.
C. increase aggregate supply.
D. decrease aggregate supply.
Answer: C
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A profit maximizing perfectly competitive firm would never operate at an output level where a. it would not cover all of its variable costs
b. it was not earning a positive economic profit. c. it was not earning a zero economic profit. d. it was not earning an accounting profit.
How do targeted asset purchases alter the outlook for the economy and inflation?
What will be an ideal response?
Exhibit 14-6 Aggregate supply curve
?
In Exhibit 14-6, the aggregate supply curve becomes vertical at GDP = $1,200 because:
A. there are no more workers available at any wage rate to increase real GDP. B. the price level remains constant. C. the only workers available would demand higher wage rates. D. the economy is experiencing low employment and low production.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.