Define what is meant by the period known as the short run
What will be an ideal response?
The short run is the period during which firms face limits imposed by some fixed factor of production and firms cannot enter or exit an industry.
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A perfectly competitive firm's horizontal demand curve implies that the firm does not have to lower its price to sell more output
Indicate whether the statement is true or false
Just as the aggregate-supply curve slopes upward only in the short run, the trade-off between inflation and unemployment holds only in the short run
a. True b. False Indicate whether the statement is true or false
Figure 14-2
If the Fed anticipates that the conditions illustrated by AD1 and SRAS in will be present in the near future, it should
a.
shift to a more restrictive policy.
b.
shift to a more expansionary policy.
c.
request that Congress raise tax rates.
d.
refuse to buy any more U.S. securities.
Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.
What will be an ideal response?