The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on:
a. how quickly planned investment spending adjusts to changes in population growth
b. how quickly planned consumption spending adjusts to changes in the price level and nominal wages.
c. how quickly technology changes to increase aggregate supply.
d. whether the economy is experiencing a recessionary gap or an expansionary gap.
e. how quickly real wages adjust to restore full employment in the labor market.
e
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In a move up the IS curve,
A) investment rises. B) output falls. C) the real interest rate falls. D) saving rises.
Double markup problems arise when
a. upstream firms have no market power b. downstream firms have market power c. upstream and downstream products are unrelated in demand d. upstream and downstream firm's pricing decisions tend to increase the demand for the other product
A downward-sloping line has a negative slope
a. True b. False Indicate whether the statement is true or false
When perfectly competitive firms are earning zero accounting profits, a. we would expect entry into the industry
b. we would expect stability in the industry, since it is in long run equilibrium. c. we would expect exit from the industry. d. we would expect none of the above.