Which of the following occurs when an expansionary gap is closed in the long run by the action of firms?
a. Output decreases, and the price level increases
b. Inflation decreases, and unemployment rises.
c. Both the equilibrium output and the price level increase.
d. Both the equilibrium output and the price level decrease.
e. Inflation rises, and unemployment decreases
a
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Assume a bank has total deposits of $100,000 and $20,000 is set aside to meet reserve requirements of the Fed. Its required reserve ratio is:
a. $20,000 b. 20 percent. c. 0.2 percent. d. 1 percent.
The first economist to point out the importance of specialization of labor was
a. Leonardo da Vinci. b. Adam Smith. c. David Ricardo. d. John Maynard Keynes. e. Enrico Caruso.
If a country has Y > C + I + G, then
a. S > I and it has a trade surplus. b. S > I and it has a trade deficit. c. S < I and it has a trade surplus. d. S < I and it has a trade deficit.
Refer to the graph shown. The firm's profit-maximizing price is:
A. g. B. h. C. e. D. f.