The upward slope of the short-run aggregate supply curve is based on the assumption that:
A. Wages and other resource prices do not respond to price level changes
B. Wages and other resource prices do respond to price level changes
C. Prices of output do not respond to price level changes
D. Prices of inputs flexible while prices of outputs are fixed
A. Wages and other resource prices do not respond to price level changes
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Refer to the figure above. When the demand curve for gas is D2 and the supply curve of gas is S, the equilibrium quantity is:
A) 50 gallons. B) 70 gallons. C) 20 gallons. D) 40 gallons.
In the figure above, the shift in the demand curve for U.S. dollars from D0 to D1 could occur when
A) the expected future exchange rate decreases. B) the U.S. interest rate rises. C) people expect that the dollar will depreciate. D) foreign interest rates increase.
Increasing economic growth may be beneficial because
a. mass poverty is a serious problem in the United States. b. most Americans do not have the basic goods and services necessary for a decent life. c. the price level falls only if the economy is growing. d. most of the world is still below the poverty level of income.
To illustrate the classical argument that "supply creates its own demand," the aggregate supply curve should be drawn:
A. downward-sloping. B. upward-sloping. C. horizontal. D. vertical.