The federal government increases spending by $50 billion and the main effect is an increase in the price level. It must be true that the economy is operating on the
a. horizontal portion of the aggregate demand curve.
b. horizontal portion of the aggregate supply curve.
c. vertical portion of the aggregate supply curve.
d. vertical portion of the aggregate demand curve.
c
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Refer to Table 15-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) buy Treasury securities. B) decrease income taxes. C) sell Treasury securities. D) decrease the required reserve ratio.
The concept of mean reversion is defined by
a. the tendency of profits to revert to zero b. the tendency of costs to revert to zero c. the tendency of economic profits to revert to zero d. the tendency of profits to revert to negative
Frictional unemployment can be the consequence of
a. workers leaving existing jobs to find ones they like better. b. one industry declining while another is growing. c. changes in the working conditions offered by competing firms. d. All of the above are correct.
What causes the long-run aggregate supply curve to shift right?
A. scarcity B. economic growth C. inflation D. unemployment