In short-run macroeconomic equilibrium

What will be an ideal response?


real GDP and price level are determined by short run aggregate supply and aggregate demand

Economics

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The cross elasticity of demand between DVDs and DVD players is likely to be

a. zero. b. positive. c. negative. d. undefined.

Economics

The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:

A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.

Economics

If there is a large increase in the price of oil and the Fed wishes to maintain stable output, which of the following should it do?

a. Do nothing, because the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, because output seldom changes when there is an increase in the price of oil d. Encourage firms to not adjust the wages they pay e. Buy bonds in the open market

Economics

A nominal, bilateral exchange rate is:

a. The weighted-average value of a currency relative to many foreign currencies. b. The nominal, effective exchange rate adjusted for a nation's price level relative to many foreign countries' prices. c. The same as the nominal, effective exchange rate. d. The value of one currency in terms of another currency.

Economics