The classical long-run aggregate supply curve is
A. vertical at a level of output below potential real GDP.
B. upward sloping.
C. upward sloping at the level of potential real GDP.
D. vertical at a level of potential real GDP.
D. vertical at a level of potential real GDP.
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Refer to the production possibilities frontier figure above. Which of the following movements requires the largest opportunity cost, in terms of good X forgone, per extra unit of good Y?
A) from point e to point d B) from point d to point c C) from point c to point b D) from point b to point a
Which of these is most likely to result when a demand-management policy is used in an economy that is experiencing stagflation?
a. A decrease in investment spending b. An increase in the rate of inflation c. An increase in unemployment d. A decrease in the rate of inflation e. A decrease in real GDP
Opportunity cost is subjective because of which of the following?
a. The calculating of opportunity cost takes information on time and other alternatives which vary from person to person. b. Use of time on a project is the same for each person. c. Alternatives are the similar for every person. d. Amount of time needed to complete a task is the same for every person.
Bank regulators impose capital requirements in order to
a. increase the amount of leverage in the economy. b. provide an incentive for banks to hold risky assets. c. ensure banks can pay off depositors. d. increase the probability of a credit crunch.