Suppose we observe rising nominal GDP, a rising price level, and constant unemployment as a result of an increase in aggregate demand. We would conclude that the aggregate supply curve is
A) upward sloping.
B) downward sloping.
C) vertical.
D) horizontal.
C
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On a graph, high correlation between the variable measured along the x-axis and the variable measured along the y-axis
A) means that changes in the variable measured along the x-axis must cause changes in the variable measured along the y-axis. B) means that changes in the variable measured along the y-axis must cause changes in the variable measured along the x-axis. C) means that changes in either variable must cause changes in the other variable. D) does NOT mean that a change in the variable measured along the x-axis must cause a change in the variable measured along the y-axis.
If the Treasury finances an expenditure by borrowing from the Fed, the money supply
A) and bank reserves fall. B) and bank reserves rise. C) rises while bank reserves remain unchanged. D) remains unchanged as bank reserves rise.
The study of microeconomics and macroeconomics differ in that:
a. microeconomics is concerned with the domestic economy and macroeconomics is concerned only with the international economy. b. microeconomics examines the individual markets of the economy while macroeconomics studies the whole economy. c. microeconomics studies the actions of households and macroeconomics studies the actions of business firms. d. microeconomics examines the whole economy while macroeconomics studies the individual units of the economy.
A firm in a perfectly competitive industry will maximize profits by adjusting
A) average total cost until it equals price. B) price until marginal revenue equals marginal cost. C) output until average revenue equals short-run average total cost. D) output until marginal cost equals marginal revenue. E) price until average revenue equals average total cost.