The short-run aggregate supply curve shows the:
A. direct relationship between the price level and real GDP purchased.
B. direct relationship between the price level and real GDP produced.
C. inverse relationship between the price level and real GDP purchased.
D. inverse relationship between the price level and real GDP produced.
Answer: B
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In the Cambridge approach, if k is .5, total output is $50 billion, and the money supply is $100 billion, the price level is
A) 0.5. B) 4.0. C) 3.0. D) 10.0.
Social welfare can be enhanced by allowing firms to trade their rights to pollute
a. True b. False Indicate whether the statement is true or false
Economists say that a market where goods are not consumed by those valuing the goods most highly is
a. laissez-faire.. b. unequal. c. inefficient. d. rational.
If the government cuts taxes by $200 million and simultaneously decreases government spending by $200 million, then
A. Aggregate demand will decrease by $200 million. B. Aggregate demand in the economy will remain unchanged. C. Aggregate demand will rise because the government decrease in purchases occurs so slowly. D. People will spend only part of their tax cut, so aggregate demand will eventually rise by $200 million.