The mathematical equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), expresses
a. how the long run equilibrium adjusts to changes in money supply.
b. how output deviates in the short run from its long run natural rate.
c. how the short run aggregate supply curve shifts.
d. how adverse shifts in aggregate supply can cause stagflation.
b
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Adverse supply shocks can cause a recession with increasing price level.
Answer the following statement true (T) or false (F)
If an increase of $5 million in investment is associated with an increase of $20 million in real Gross Domestic Product (GDP), the multiplier is
A. 1. B. 5. C. 4. D. 2.
If consumers completely cease purchasing a product when its price increases by any amount, then demand is:
A. unit elastic. B. perfectly inelastic. C. perfectly elastic. D. inelastic.
Which of the following conditions would prevent price discrimination?
a. an economic profit b. a monopoly market structure c. profit maximization d. the inability to identify those customers willing to pay more e. the ability to prevent low-price customers from reselling to high-price customers