When the economy is operating at a point where aggregate demand equals long-run aggregate supply, it must be true that:
A. aggregate demand also equals short-run aggregate supply.
B. the economy is in long-run equilibrium.
C. prices and expected prices are the same.
D. All of these are true.
D. All of these are true.
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A winter ice storm has paralyzed the entire east coast, reducing productivity sharply. This supply shock shifts the marginal product of labor curve
A) up and to the right, raising the quantity of labor demanded at any given real wage. B) down and to the left, reducing the quantity of labor demanded at any given real wage. C) up and to the right, reducing the quantity of labor demanded at any given real wage. D) down and to the left, raising the quantity of labor demanded at any given real wage.
A perfectly competitive firm's short-run break-even output occurs
A) at the minimum point of its average variable cost curve. B) at the minimum point of its average total cost curve. C) at the minimum point of its marginal cost curve. D) at the intersection of its total cost curve and its marginal revenue curve.
The cost of producing a car in Germany is 2,000 bushels of wheat, and the cost of producing a car in Canada is 1,200 bushels of wheat. The two countries can both benefit if the terms of trade are
a. greater than 2,000 of wheat per car b. less than 1,200 bushels of wheat per car c. between 1,200 bushels and 2,000 bushels of wheat per car, and Germany produces wheat d. between 1,200 bushels and 2,000 bushels of wheat per car, and Germany produces cars e. between 1,200 bushels and 2,000 bushels of wheat per car, and Canada produces wheat
If a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?
a. It has an overall or net inflow of financial investment. b. It is not an overall or a net investor in other countries. c. It has an overall or net outflow of financial investment. d. Its government is not indebted to other governments.