Expansions of aggregate demand cause the economy to move along what is essentially a vertical aggregate supply curve when
A) wage increases catch up to inflation.
B) higher prices can reduce interest rates no further.
C) money supply growth rises to equal the rate of aggregate demand expansion.
D) from a recession level of output, full employment is reached.
A
You might also like to view...
If the government set a price floor at $18
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. the price floor would not have any effect on this market.
C. then quantity demanded would be greater than quantity supplied.
D. there would be a permanent surplus, at least until the price floor was lifted.
Explain how the law of comparative advantage does benefits developing countries.
What will be an ideal response?
Paper money has been in use since the
A. Roman Empire. B. eleventh century in China. C. Civil War in the United States. D. development of money-center banking in nineteenth-century London.
The aggregate supply curve shifts rightward when
A) the money wage rate falls. B) government purchases increase. C) potential GDP decreases. D) income taxes increase. E) the money wage rate rises.