The long-run aggregate supply curve is vertical at $10 trillion, but the short-run aggregate supply curve intersects the aggregate demand curve at $12 trillion. From this, we know that
A) the economy is operating below full capacity in the short run, and will have to adjust by hiring more workers, thus reducing unemployment.
B) the price level is too high. The only way long-run equilibrium can be restored is to lower the price level.
C) adjustments will have to occur so that the long-run aggregate supply equals $12 trillion.
D) adjustments will have to occur so that the short-run aggregate supply intersects the aggregate demand curve at $10 trillion.
D
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Choosing from among the following, the worst recession was in
A. 1937-1938. B. 1980. C. 1990-1991. D. 2001.
An increase in a family’s income will cause its budget line to
A. become steeper. B. become flatter (less steep). C. move closer to the origin. D. move away from the origin. E. become more convex toward the origin.
Albert and Betty hire Christine and David to play music at their wedding. Elizabeth, who lives behind the church, cannot study because of the loud music. The third party is
a. Albert b. Betty c. Christine d. David e. Elizabeth
In February 2013, the supply of money (M1) in the United States was about:
A. $1,112 billion. B. $2,472 billion. C. $1,359 billion. D. $10,412 billion.