(Figure: Two SRAS Curves) The figure shows the AD-AS model with two SRAS curves. If the economy is initially at Point A and expected inflation rate remains unchanged, the economy can achieve a real GDP growth rate of 9% only by
What will be an ideal response?
moving along SRAS1 to Point B
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A shortage of hospital beds will likely lead to
a. an increase in the supply of hospital beds. b. a decrease in the demand for hospital beds. c. an increase in the price of a hospital stay. d. a decrease in the price of a hospital stay. e. none of the above.
When an activity results in the creation of external benefits, markets will produce more than the socially optimal level of that activity
a. True b. False
Most waste generated in the U.S. ends up in landfills because
a. the low opportunity cost of time discourages recycling b. Americans earn low incomes c. the price of land is relatively low d. the low wages in the repair industry encourages repairs e. of low productivity and high wages in the waste disposal industry
Excess capacity arises when firms cannot sell all of their output at the current market price
a. True b. False