The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system.
b. is easily added the IS-LM framework of aggregate demand.
c. is fundamentally incompatible with the Keynesian system.
d. is consistent with the IS-LM framework if all shocks are to the IS curve.
e. none of the above.
C
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Why is it that the consumer can maximize total net utility only if the purchase quantity brings marginal utility as close as possible to equality with price?
What will be an ideal response?
Figure 33-6
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Figure 33-6 (b) illustrates that
A. in the short run, it is possible to “ride the Phillips curve” down toward lower rates of inflation. B. in the short run, it is possible to “ride the Phillips curve” up toward lower unemployment by stimulating aggregate demand. C. the Phillips curve connecting points g, e, and r is not a menu of policy choices. D. All of these responses are correct.
During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force
a) 25% b) 65% c) 45% d) 85%
You sell your good in a perfectly competitive market where the market price is $7.00. When you sell 100 units your total revenue is $700. When you sell 101 units:
A. total revenue increases by less than $7. B. total revenue increases by exactly $7. C. total revenue increases by more than $7. D. total revenue may increase or decrease.