The long-run aggregate supply curve of an economy corresponds to
A) a point inside the production possibilities curve.
B) a point outside the production possibilities curve.
C) a point on the production possibilities curve.
D) none of the above: there is no relationship between the long-run aggregate supply curve and the production possibilities curve.
C
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Which of the following is a liability for a bank?
a. U.S. government securities owned by the bank b. Deposits with the Fed c. Checkable deposits d. Consumer and business loans e. Building and furniture owned by the bank
Market allocation and the political process differ in that
a. competition is present in the market sector but not in the political sector. b. scarcity is a constraint in the market sector but not the political sector. c. there is a one-to-one link between payment for and receipt of a good in the market sector, but this is often not true in the political sector. d. in the political sector, voters have a strong incentive to acquire information that will help them make better decisions, but in the market sector, consumers do not have much incentive to acquire information.
If velocity remains constant, which of the following examples would cause deflation?
a. Money supply increases by 9 percent; real GDP increases by 4 percent. b. Money supply increases by 6 percent; real GDP increases by 8 percent. c. Money supply increases by 3 percent; real GDP increases by 2 percent. d. Money supply increases by 8 percent; real GDP increases by 8 percent.
The J-curve effect that results from currency depreciation results is due to
A) the initial effect having positive effects on the current account balance. B) the value of imports increasing by more than the value of exports at the time of devaluation. C) exports and imports being totally unresponsive to changes in exchange rates. D) decreases in the dollar price of imports.