Consider the following statement: "If the government attempts to raise employment through increased fiscal spending, all it will end up doing is increasing the price level." The statement rests on the assumption that:
a. the aggregate demand curve is a horizontal line.
b. the aggregate supply curve is a vertical line.
c. the aggregate supply curve is upward-sloping.
d. the aggregate supply curve is downward-sloping.
e. the aggregate supply curve is a horizontal line.
b
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Figure 7.6 shows prices, demands, and cost data for the only restaurant in a small town. What is its profit from non-senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price?
A. $1,200 B. $1,500 C. $2,280 D. $2,560
Under which one of the following situations would you be better off?
A. You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B. You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. C. You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. D. You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.
Collusion always involves firms engaging in a
A. noncooperative game. B. cooperative game. C. vertical merger. D. horizontal merger.
Regarding the law of supply, which of the following statements is correct?
A) As the price of a good or service rises, the quantity supplied will increase. B) As the price of a good or service rises, the quantity supplied will decrease. C) The ceteris paribus assumption does not apply. D) As demand falls, supply rises.