The Keynesian short-run aggregate supply (SRAS) curve
A. assumes a full-employment level of real Gross Domestic Product (GDP).
B. is horizontal.
C. shows that real Gross Domestic Product (GDP) will increase only if the price level increases.
D. does not reflect any changes in nominal Gross Domestic Product (GDP).
Answer: B
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Before discovering that the short-run Phillips curve does not show the true long-run situation, policy makers were successful in trying to bring the economy to the zero-inflation, zero-unemployment point on the short-run curve
a. True b. False Indicate whether the statement is true or false
In constructing a demand curve for product X:
A. consumer preferences are allowed to vary. B. the prices of other goods are assumed constant. C. money incomes are allowed to vary. D. the supply curve of product X is assumed constant.
Why is it difficult for the market to deliver socially efficient quantities of goods like clean air or street lighting?
What will be an ideal response?
An unexpected increase in nonlabor income will have ________ effect on a household's leisure.
A. a positive B. an uncertain C. no D. a negative