Moving along which curve does the money wage rate and the price level change in the same proportions?
A) the AD curve
B) the SAS curve
C) the LAS curve
D) None of the above because there is no curve along which both the money wage rate and the price level change in the same proportions.
C
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When the consumer spends a large portion of her income on a good, demand will be
A) elastic. B) unit-elastic. C) inelastic. D) elastic, unit-elastic or inelastic depending upon supply.
Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy will cause the demand for the Canadian dollar to _____________ and the supply to __________
a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease
Economists call the idea that increases in government spending cause decreases in private investment
a. crowding out b. locking in c. the liquidity trap d. automatic stabilization e. the Phillips trade off
The U.S. Federal government is unlikely to default on its bonds because:
A. The bonds are all long term bonds and they are insured B. The Federal government has the ability to collect taxes and to sell securities to the Fed C. Foreigners are willing to buy the Federal government bonds and lend to the U.S. government D. The Federal government can always borrow from the states and from businesses