If prices and wages are flexible, a decrease in aggregate demand will in the long run cause only a(n):
A. Decrease in the price level
B. Increase in the price level
C. Increase in the unemployment rate
D. Decrease in real output
A. Decrease in the price level
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The economy's long-run aggregate supply curve ________.
A. slopes downward and to the right B. slopes upward and to the right C. is vertical D. is horizontal
If aggregate demand is stable and there is economic growth, the economy will experience
A) secular depreciation. B) secular decline. C) secular deflation. D) secular degeneration.
The idea that nominal wages are slow to adjust to changing economic conditions can explain the ________ slope of the short-run aggregate-supply curve.
a) upward b) downward c) horizontal d) vertical
For which of the following goods are consumers likely to have the most elastic demand?
A. clothing B. sweaters C. wool sweaters D. purple wool sweaters