The horizontal segment of the aggregate supply curve:
a. shows that real GDP can increase only by affecting the economy's price level.
b. shows that real GDP can increase without affecting the economy's price level.
c. depicts a positive relationship between real GDP and the price level.
d. depicts a negative relationship between real GDP and the price level.
e. marks the full-employment level of real GDP.
b
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An outward shift in the consumer demand for wheat will
A) raise the price of wheat and shift inward the marginal revenue product of labor producing wheat. B) lead to more capital and less labor used in producing wheat. C) raise the price of wheat and shift out the marginal revenue product of labor producing wheat. D) lead to downward pressure on the wages of those producing wheat.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
We would expect the risk spread between Baa bonds and U.S. Treasury securities of the same maturities to:
A. remain relatively constant over the business cycle. B. increase during economic growth periods. C. widen during periods of economic recession. D. decrease during economic slowdowns.
Refer to the above figure. Which of the above panels represents complete income equality?
A. Panel A B. Panel B C. Panel C D. Panel D