In the Keynesian model which includes the Keynesian short-run aggregate supply curve
A) an increase in aggregate demand would causes the price level to rise, but does not change the level of real GDP.
B) an increase in aggregate demand causes real GDP to rise without changing the price level.
C) an increase in aggregate demand changes neither the price level nor the level of real GDP.
D) an increase in aggregate demand causes real GDP and the price level to decrease.
B
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Assume that a monopolist practices perfect price discrimination. The firm will produce an output rate
A) that is greater than the efficient level of output. B) that is less than the efficient level of output. C) that is equal to the efficient level of output. D) that converts consumers surplus into a deadweight loss.
If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down
Indicate whether the statement is true or false
When the elasticity of demand for a particular good is between zero and -1, _____
a. demand is elastic b. demand is inelastic c. demand is unit-elastic d. the good is an inferior good e. the good is a normal good
Labor costs usually increase at an increasing rate at high levels of output for all of the following reasons except
a. labor productivity begins to decline b. the marginal gains from specialization decrease c. the price of labor rises as more workers are hired d. the workers hired later may not be as qualified e. fuel costs begin to increase as more output is produced