Over time in a growing economy, the long-run aggregate supply curve will

A) become horizontal at the long-run potential price level.
B) shift rightward.
C) shift leftward.
D) become increasingly steep.


B

Economics

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If the FDIC eliminated its insurance program for deposits, then

A) banks would probably hold fewer reserves. B) moral hazard would be increased. C) individual depositors would have more incentive to ascertain the soundness and solvency of the bank. D) the banking system would probably fail.

Economics

A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?

A) It would shift outward because unemployment would be reduced. B) Nothing would happen because the nation would still have the same capabilities. C) A tradeoff would occur to replace the resources and goods destroyed. D) It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed. E) It would not shift because people would get to work to replace any capital that was destroyed.

Economics

If households in the economy decide to take money out of checking account deposits and hold it as currency, this will initially

A) decrease M1 and not change M2. B) not change M1 and not change M2. C) not change M1 and increase M2. D) decrease M1 and decrease M2.

Economics

Based on Table 3.1, the pre-trade relative price of a computer in Mexico is

A) three pairs of shoes. B) one pair of shoes. C) one-half pair of shoes. D) one-third pair of shoes. E) None of the above.

Economics