In the long run, the shape of the aggregate supply curve is
a) upward-sloping, because output can be increased only at higher costs
b) horizontal, because all inputs are variable
c) horizontal, because markets become perfectly competitive
d) vertical, because further expansion of output is unprofitable, regardless of prices
e) downward-sloping, because firms must ultimately charge lower prices in order to sell more output
d) vertical, because further expansion of output is unprofitable, regardless of prices
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The advantage of holding money as an asset is that
A) money earns interest. B) money is liquid. C) the value of money appreciates over time. D) money is safe from thievery.
A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in:
a. frictional unemployment. b. structural unemployment. c. cyclical unemployment. d. a higher labor force participation rate.
If the GDP gap is $400 billion and AS is upward-sloping, an effective fiscal policy would be to increase aggregate demand by $400 billion.
Answer the following statement true (T) or false (F)
Price leadership is when one firm sets price for the industry and the others follow.
Answer the following statement true (T) or false (F)