The full employment level of real GDP can be represented on an aggregate supply and demand diagram as a(n):
a. vertical line.
b. upward-sloping line.
c. horizontal line.
d. downward-sloping line.
a
You might also like to view...
What kinds of economic conditions indicate that the Fed should expand the money supply?
Poverty is
A. an absolute, not a relative concept. B. a relative concept, not an absolute. C. both an absolute and a relative concept. D. neither an absolute nor a relative concept.
Deflation:
a. under the current trends will cause consumers' purchasing power to shrink. b. has been persistent in the U.S. economy since the Great Depression. c. was prevalent during the oil shocks of the 1970s. d. none of these choices.
Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
A. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. B. In the short run, the unemployment rate will decrease, but in the long run, it will self correct to the natural rate of unemployment. C. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. D. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.