Use the following graph to answer the next question.
Which line represents the long-run aggregate supply curve?
A. 1
B. 2
C. 3
D. 4
Answer: D
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Which of the following would NOT shift the demand curve for turkey?
A) an increase in income B) a decrease in the price of ham C) a change in people's preferences for turkey D) a change in the price of a turkey
In answer to the question, "Could they see the Great Depression coming?", Hughes and Cain (2011) respond:
(a) No—Many people firmly believed that markets would self-correct and eventually recover with no government intervention (b) No—many people seemed to believe that the prosperity of the 1920s would continue indefinitely because they believed that the economy was built to sustain high and stable rates of growth with minimal cyclical fluctuation when markets were permitted to clear themselves without government interference. (c) Yes—in the late 1920s, a majority of economists reported and publicized that the economy was becoming dangerously unbalanced and that a serious downturn was near. (d) Yes and no—by the late 1920s, the economics profession was about equally split on the possibility of a serious downturn in the near future.
Which combination of government policies would be most likely increase labor demand?
a. Increasing subsidies to education and increasing subsidies to businesses for hiring new employees b. Reducing income tax rates and cutting transfer payments to the needy c. Raising income tax rates and cutting transfer payments to the needy d. Reducing subsidies to education and increasing subsidies to businesses for hiring new employees e. Increasing subsidies to education and reducing subsidies to businesses for hiring new employees.
If people expect future earnings of Galt Corporation to be high relative to current earnings, then
a. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively high. b. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively low. c. the P/E ratio of its stock will be low. A P/E ratio of 8 is relatively high. d. the P/E ratio of its stock will be low. A P/E ratio of 8 is relatively low.