A vertical aggregate supply curve favors which of the following policies?
A. Discretionary policy
B. Fiscal policy
C. The Fed's eclecticism
D. Fixed rules
D. Fixed rules
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant's:
a. sunk cost. b. deadweight loss. c. marginal cost. d. opportunity cost.
At the point where consumption equals disposable income, the average propensity to consume equals 1
a. True b. False Indicate whether the statement is true or false
What price will a perfectly competitive firm typically charge in the long run?
a. A price that equals the minimum of its average cost of production b. A price that is lower than its average cost of production c. A price that ensures an accounting profit and an economic profit d. A price that is lower than the price charged by competitors