What are the conditions for long-run equilibrium?
What will be an ideal response?
The conditions include that current output equals potential output. This puts the economy on its long-run supply curve. Also current inflation equals target inflation. This means that monetary policymakers will not have any incentive to alter the current rate. And finally, current inflation equals expected inflation. This will tend to keep the short-run aggregate supply curve stable.
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Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel's and Mia's hourly productivity are shown in Table 3.3. Which of the following is TRUE?
A) Nigel has both an absolute and comparative advantage in bandana production. B) Nigel has both an absolute and comparative advantage in hair pin production. C) Nigel has neither an absolute nor comparative advantage in hair pin production. D) Nigel has neither an absolute nor a comparative advantage in bandana production.
What aspects of bargaining can affect market outcomes?
Foreign direct investment includes portfolio investment
a. True b. False Indicate whether the statement is true or false
Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of ________ pounds of fish or a maximum of ________ pounds of shrimp.
A. 30; 50 B. 30; 15 C. 50; 30 D. 15; 30