The long-run aggregate supply curve represents the level of output possible if the economy:
A. is operating at full capacity.
B. is operating at an unemployment rate of zero.
C. has a zero inflation rate.
D. has no structural unemployment.
A. is operating at full capacity.
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Refer to Figure 10.1. If Daisy does not contribute to the lighting, Bo should
A) contribute if Luke contributes. B) not contribute only if Luke does not contribute. C) not contribute regardless of what Luke decides to do. D) contribute if Luke does not contribute.
Collateral is
A) the interest rate that banks charge high-quality borrowers. B) assets pledged to the bank in the event the borrower defaults. C) the difference between the value of a bank's assets and the value of a bank's liabilities. D) required reserves minus excess reserves.
When a temporary negative supply shock hits the economy ________
A) the divine coincidence does not always hold B) the divine coincidence holds in the short-run C) the divine coincidence does not hold in the long-run D) all of the above E) none of the above
In a two-input model you can tell that a non-optimal short-run production decision is being made if
a. all decisions in the short run are nonoptimal b. the rate of technical substitution is equal to the ratio of the input prices c. the rate of technical substitution is not equal to the ratio of the input prices