Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________, because ________
A) traditional Keynesian model; long-run supply shocks are incompatible with adaptive expectations
B) traditional Keynesian model; demand fluctuations are considered of dominant importance
C) real business cycle model; shocks cannot persist in the long run, when prices and wages are flexible
D) new Keynesian model; such shocks are anticipated by forward-looking consumers and firms
B
You might also like to view...
In the above figure, what could cause the shift of aggregate demand fromAD1 to AD2?
A) depletion of raw materials B) an increase in international trade barriers C) a decrease in consumer confidence D) an increase in input prices
Few firms in the United States are monopolies because
A) when a firm earns profits, other firms will enter its market. B) most products that firms produce have substitutes. C) few firms experience economies of scale. D) of antitrust laws.
A temporary negative supply shock ________ real interest rates and ________ output in the short run, thereby its effect on stock prices is ________
A) raises; lowers; negative B) raises; raises; ambiguous C) lowers; raises; negative D) lowers; raises; positive
Restricting entry to a profession through licensing or certification requirements
A) increases welfare. B) decreases welfare. C) may increase or decrease welfare. D) leaves welfare unchanged.