If policymakers expand aggregate demand, then in the long run
a. prices will be higher and unemployment will be lower.
b. prices will be higher and unemployment will be unchanged.
c. prices and unemployment will be unchanged.
d. None of the above is correct.
b
You might also like to view...
Even though airfares have been increasing, the revenue earned by airlines has declined. Based on this statement, what may be concluded about price, cross-price, or income elasticity of demand?
What will be an ideal response?
It is difficult for a private market to provide the economically efficient quantity of a public good because
A) by law governments cannot use cost-benefit analysis to determine this quantity. B) it is too expensive to produce the necessary amount of the good. C) individual preferences are not revealed in the market for the good. D) public goods produce positive and negative externalities.
The U.S. economy is not a perfectly competitive market. There are costs associated with negotiating contracts, enforcing agreements, taxes and less than perfectly competitive firms. Nevertheless, according to Wallis and North (1986), the U.S
economy has grown in the presence of these transaction costs and these costs have risen sharply as a percentage of GDP between 1890 and 1970. Indicate whether the statement is true or false
To derive personal income from national income, you
a. subtract retained earnings, Social Security taxes, and transfer payments, and add in corporate business taxes b. subtract retained earnings, Social Security taxes, corporate business taxes, and add in transfer payments c. subtract retained earnings, corporate business taxes, and transfer payments, and add in Social Security taxes d. subtract corporate business taxes, Social Security taxes and transfer payments, and add in retained earnings e. subtract Social Security taxes, retained earnings, and personal taxes, and add in transfer payments