Long-run full-employment equilibrium assumes:
a. a downward-sloping production function.
b. a downward-sloping long-run supply curve (LRAS)
c. the CPI index price level equals the equilibrium wage rate.
d. the CPI equals aggregate demand (AD) equals short-run aggregate supply (SRAS) equals long-run aggregate supply (LRAS).
d
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Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is: a. consumer surplus. b. producer surplus. c. marginal cost
d. deadweight loss.
If (T ? G) = (X ? IM), then (S ? I)
a. is greater than zero. b. is zero. c. is less than zero. d. cannot be calculated.
Over the course of the business cycle, most firms respond
a) to negative shocks by cutting wages b) to positive shocks by raising prices c) to negative shocks by cutting prices d) to positive shocks by raising output e) all of the above
Farmers cannot individually affect market price because
A. There is an infinite demand for their goods. B. Demand is perfectly inelastic for the farmer's produce. C. The government exercises control over the market power of competitive firms. D. Their individual production is insignificant relative to the production of the market.