Refer to Figure 33-2. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience
a) a rising price level and a rising level of output.
b) a falling price level and a rising level of output.
c) a rising price level and a falling level of output.
d) a falling price level and a falling level of output.
e) a falling price level and a rising level of unemployment.
Ans: c) a rising price level and a falling level of output.
You might also like to view...
With respect to labor supply, the substitution effect takes account of the point that at higher wage rates
A) a person can afford to take more leisure. B) leisure has become less expensive and so a person consumes less leisure. C) there are no factors inducing a person to work less. D) leisure has become more expensive and so a person consumes less leisure.
In the above table, what is the marginal factor cost of the 6th worker?
A) $30 B) $18 C) $120 D) $20
In a free market, a given unit of an input will be used by the firm that
a. earns the largest addition to total profit from the use of that unit of input. b. has the lowest marginal cost of producing another unit of output. c. sells its output for the highest price. d. earns the largest total profit.
In 2008-2010, American policy makers decided to risk
a. higher inflation for the sake of decreasing unemployment. b. higher unemployment to hold down inflation. c. increasing taxes for the sake of reducing the budget deficit. d. reducing government spending for the sake of balancing the budget.