If weak aggregate demand is pushing the economy into recession, which of the following must be true?
A) The economy is at an equilibrium that is on the long-run Phillips curve.
B) The economy is at an equilibrium that is not on the long-run Phillips curve.
C) Contractionary monetary policies will push the economy back to the long-run Phillips curve.
D) The economy is at an equilibrium that is on the long-run aggregate supply curve.
B
You might also like to view...
When Taylor raised the price of earrings at Taylor's Boutique, her total revenue from selling earrings increased. This suggests that:
A. there are many other boutiques competing with Taylor. B. the demand for Taylor's earrings at the original price was elastic. C. there was excess demand for earrings at the original price. D. the demand for Taylor's earrings at the original price was inelastic.
Consider the ordinary and compensated demand curves for a normal good. If the price of the good falls, then
a. the ordinary demand curve will show the larger increase in quantity demanded. b. the compensated demand curve will show the larger increase in quantity demanded. c. the increase in quantity demanded will be the same for the ordinary and compensated demand curves. d. we cannot predict whether ordinary or compensated demand will show the larger response in quantity demanded.
Full employment describes the condition in which
a. 100 percent of the civilian labor force is employed. b. 95 to 96 percent of the civilian labor force is employed. c. there is no frictional unemployment. d. unemployment is 10 percent or less.
Assume that the supply of coffee in a competitive market decreases. What will most likely happen to the equilibrium price and quantity of coffee?
a. Price will increase; quantity will increase b. Price will decrease; quantity will increase c. Price will increase; quantity will decrease d. Price will decrease; quantity will decrease