Using the vertical long-run aggregate supply curve, an increase in the aggregate demand for an economy would have which of the following effects in the long-run?
A) An increase in government spending to shift aggregate demand to the right.
B) An increase in aggregate output and a rise in the price level.
C) No change in aggregate output and a fall in the price level.
D) No change in aggregate output and a rise in the price level.
Ans: D) No change in aggregate output and a rise in the price level.
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When disposable income increases,
A) the consumption function shifts downward. B) there is a movement downward along the consumption function, but the consumption function does not shift. C) there is no movement along the consumption function, and the consumption function does not shift. D) the consumption function shifts upward. E) there is a movement upward along the consumption function, but the consumption function does not shift.
In the above figure, if the minimum wage is set at $6 per hour, what quantity of labor is employed?
A) 100 million hours B) 200 million hours C) 300 million hours D) 400 million hours
When a random demand and marginal cost are linear, producing the quantity at which the marginal cost equals the ________ maximizes ________.
A) expected marginal revenue; expected profit B) marginal revenue; profit C) marginal revenue; expected profit D) expected marginal revenue; profit
The modern view of the Phillips curve suggests that
a. when inflation is less than anticipated, unemployment will fall below the natural rate. b. when inflation is steady, actual unemployment will equal the natural rate of unemployment. c. systematic demand stimulus policies will be unable to affect prices in the long run. d. there will be a trade-off between inflation and unemployment in the long run.