Proponents of the real business cycle model argue that the short-run aggregate supply curve is
A) flat.
B) positively sloped.
C) vertical.
D) negatively sloped.
Answer: C
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As price decreases and we move down further along a linear demand curve, the price elasticity of demand will:
a. decrease. b. increase. c. stay the same. d. approach infinity. e. increase or decrease.
Which of the following statements is true concerning the consumption function?
a. It slopes upward. b. Its slope equals the MPC. c. It represents the direct (positive) relationship between consumption spending and the level of real disposable income. d. If the consumption function lies above the 45-degree line then saving is positive. e. All of these.
When a second firm enters a monopolist's market,
A. the monopolist's demand curve decreases. B. the monopolist's demand curve increases. C. the monopolist's supply curve decreases. D. the monopolist's supply curve increases.
Which of the following is a simplifying assumption associated with the short-run Keynesian model of equilibrium real Gross Domestic Product (GDP) determination?
A. There is no depreciation. B. Businesses pay indirect taxes. C. Gross private domestic investment exceeds net private domestic investment. D. Most business profits are distributed to shareholders.