The short-run aggregate supply curve is positively sloped because
A. some price adjustments take place in the short-run.
B. complete price adjustments take place in the short-run.
C. real interest rates rather than nominal rates are used.
D. no price adjustments take place in the short-run.
Answer: A
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c. decrease their fixed cost of production. d. benefit from economies of scale.
Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good
a. True b. False Indicate whether the statement is true or false
The backward-bending section of the labor supply curve suggests that
A. there is no income effect. B. the income effect outweighs the substitution effect at those higher wage levels. C. the substitution effect outweighs the income effect at those higher wage levels. D. None of the choices are correct.
As the tax rate decreases, the absolute value of the tax multiplier
A. increases. B. does not change. C. decreases. D. could either increase or decrease depending on the value of the MPC.