For a given shift of the aggregate demand curve, the steeper the short-run aggregate supply curve, the larger the change in real GDP
a. True
b. False
Indicate whether the statement is true or false
False
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Use the following graph to answer the next question.
Suppose the economy is currently in equilibrium at output level Q2, but full-employment output is at level Q1. If the government fails to enact fiscal policy and no other conditions change, the eventual price level will most likely be closest to
A. P0. B. P1. C. P2. D. P3.
If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is
A) -3%. B) 3%. C) 6.67%. D) 15%.
If there are human capital externalities, then
A) human capital should be taxed. B) convergence in per capita incomes occurs. C) differences in human capital across countries can persist. D) pollution is a problem.
The long-run labor demand curve is relatively flatter than the short-run labor demand curve because, in the short run,
A) the wage rate is fixed. B) the firm cannot vary the amount of capital used. C) the firm is a price taker. D) All of the above.