An inflationary gap will eliminate itself through a process of price increases
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose the market demand curve is P = 40 - 2Q and the constant marginal cost of production is MC = 20. Which of the following is a valid expression for the collusion curve?
A) Q = 5 B) Q1 = 5 - Q2 C) Q1 = Q2 = 5 D) Q1 = 40 - Q2
According to the quantity theory of money, an excess quantity of money supplied will lead to
A) a reduction in spending and higher interest rates. B) a reduced level of real Gross Domestic Product (GDP). C) a higher level of employment. D) a higher price level.
At a perfectly competitive firm, all of the following is true of the MRP curve EXCEPT
A) the MRP curve is the derived supply of labor. B) the MRP curve shifts leftward when labor productivity falls. C) the MRP curve shifts rightward when the product price rises. D) the MRP curve shifts leftward when the demand for the final product falls.
According to classical economists, in an economy where people possess rational expectations, adjustments occur very slowly
a. True b. False Indicate whether the statement is true or false