If the aggregate supply curve is vertical, then shifts in aggregate demand will not change aggregate output
a. True
b. False
Indicate whether the statement is true or false
True
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An increase in the demand for labor will ________ wages and ________ employment
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
At a peak in the business cycle, the macroeconomic equilibrium is ________ the level of potential real GDP
A) greater than B) equal to C) less than D) falling below E) None of the above answers is always correct because the relationship depends on whether the previous phase of the business cycle had been a recession or an expansion.
A natural monopoly's output is less if it is regulated with
A) a marginal cost pricing rule than if it is unregulated. B) an average cost pricing rule than if it is unregulated. C) an average cost pricing rule than if it is regulated with a marginal cost pricing rule. D) a marginal cost pricing rule than if it is regulated with an average cost pricing rule. E) More information about the firm's demand is needed to determine how its output depends on what regulation it faces.
Which of the following changes does NOT shift the short-run aggregate supply curve?
A) an increase in the price level B) an increase in technology C) an increase in the quantity of capital D) an increase in the money wage rate