When resources are at full capacity, output is less responsive to changes in ____ and the price level is ____
a. prices; stable
b. prices; less responsive
c. aggregate demand; highly responsive
d. aggregate demand; less responsive
c
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California is the sole producer of almonds in the United States. Suppose the price for a pound of almonds has increased during the past year. It is also predicted that almond prices will remain high. Over time, we predict that the
A) elasticity of supply will increase. B) elasticity of supply will decrease. C) elasticity of supply will remain constant. D) elasticity of supply will increase and then decrease.
Budget constraints exist for consumers because
a. their utility from consuming goods eventually reaches a maximum level b. even with unlimited incomes, they have to pay for each good they consume c. they have to pay for goods and they have limited incomes d. prices and income are inversely related e. demand curves for goods generally slope downward
If a bank posts a nominal interest rate of 4 percent, and inflation is expected to be 3 percent, then
a. the expected real interest rate is 7 percent. b. the expected real interest rate is 1 percent. c. the expected real interest rate is 1.33 percent. d. the expected real interest rate is 12 percent.
When the price level changes from PL2 to PL1, what happens to the quantity of real GDP that suppliers are willing and able to supply?
a. It increases from RGDP2 to RGDP1.
b. It increases from RGDP1 to RGDP2.
c. It decreases from RGDP1 to RGDP2.
d. It decreases from RGDP2 to RGDP1.