The flatter the aggregate supply curve, the less the amount of government spending necessary to close a $1 billion GDP gap
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
The payoff matrix is associated with
a. cartel pricing b. game theory c. the behavior of a godfather firm in oligopoly d. long-run equilibrium in monopolistic competition e. price discrimination
In the past there have been violent protests against the World Bank and the World Trade Organization. The protesters argued that these institutions promote free trade and also encourage corporations in rich countries to invest in poor countries. The protesters contended that these practices make rich countries richer and poor countries poorer. An economist would
a. disagree with the protesters because these practices will help make both rich and poor countries richer. b. disagree with the protesters about free trade, but would agree with the protesters about corporate investment. c. disagree with the protesters about corporate investment, but would agree with the protesters about free trade. d. agree with the protesters.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Based on their production possibilities frontiers, Tom and Jerry:
A. can both benefit from trade because absolute advantage exists. B. cannot benefit from trade because Tom has the absolute advantage in both goods. C. could both benefit from trade because comparative advantage exists. D. will not decide to trade because no comparative advantage exists.