If full-employment GDP is equal to $4.2 trillion, what does the long-run aggregate supply curve look like?
A) It is a horizontal line at $4.2 trillion of GDP.
B) It is a vertical line at a level of GDP below $4.2 trillion.
C) It is a vertical line at $4.2 trillion of GDP.
D) It is a vertical line at a level of GDP above $4.2 trillion.
Answer: C
You might also like to view...
If the marginal propensity to consume (MPC) is 4/5, the value of the simple multiplier is: a. 4
b. 1/5. c. 4/5. d. 5/4. e. 5.
The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009
a. was intended to reduce unemployment. b. may lead to excessive inflation over time. c. resulted in higher taxes and an increased supply of money. d. Both a and b are correct.
Which of the following is eliminated when the economy's output is equal to full-employment GDP?
A. The MPC. B. The multiplier. C. Leakages and injections. D. The real GDP gap.
The table shows the aggregate demand and aggregate supply schedule for a hypothetical economy.Real Domestic Output Demanded (in Billions)Price Level (Index Value)Real Domestic Output Supplied (in Billions)$3,000350$9,0004,0003008,0005,0002507,0006,0002006,0007,0001505,0008,0001004,000Refer to the above table. Using the original data from the table, if the quantity of real domestic output demanded increased by $3000 and the quantity of real domestic output supplied increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A. 300 and $9000. B. 250 and $8000. C. 200 and $7000. D. 350 and $8000.