The real balance effect works through a change in the value of
A) monetary assets in response to changes in the unemployment rate.
B) nonmonetary assets in response to changes in the unemployment rate.
C) monetary assets in response to changes in the price level.
D) nonmonetary assets in response to changes in the price level.
C
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Smart phones are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones
What will be an ideal response?
The excess capacity theorem states that
A. society is worse off with fewer monopolistic competitors. B. costs of production under monopolistic competition can be lowered by reducing the number of producers. C. lack of excess capacity leads to shortages during periods of unexpected growth in demand for goods produced by monopolistic competition. D. there is too much choice in our economy.
If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that
A) the economy is already at full employment. B) the aggregate supply curve is upward sloping. C) the aggregate supply curve is horizontal. D) the aggregate demand curve is vertical.
The long-run marginal cost (LMC) is the increase in the cost incurred by the firm when producing one additional unit of output, holding:
A. neither the workforce nor the production facility constant. B. the workforce and the production facility constant. C. the workforce constant. D. the production facility constant.