The short-run aggregate supply curve in modern Keynesian analysis
A. is a negatively sloped curve.
B. is a horizontal line the same as in the Keynesian model.
C. is an upward sloping curve.
D. is a vertical line the same as in the classical model.
Answer: C
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Explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear
What will be an ideal response?
In early 1996, Congress proposed an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture?
a. It would decrease, because agricultural prices would fall. b. It would decrease, because agricultural prices would rise. c. It would increase, because agricultural prices would fall. d. It would increase, because agricultural prices would rise.
If a nation's nominal GDP is $3,257 million and its price level is 110, then its real GDP is
A. $2960.9 million. B. $24.67 million. C. $1960.9 million. D. $2467.42 million.
Refer to Price Ceiling. Area B + D represents
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. the deadweight loss due to the price ceiling.
b. the fall in consumers' surplus caused by the imposition of the price ceiling.
c. the value of the time and resources spent by consumers to acquire the limited supply.
d. the post-ceiling profits earned by the producers of the good.