The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to...
The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be:
| a. |
vertical at the full-employment level of real GDP. |
|
| b. |
positively sloped at the full-employment level of real GDP. |
|
| c. |
horizontal at the full-employment level of real GDP. |
|
| d. |
backward bending at the full-employment level of real GDP. |
Homework Answers
The classical aggregate supply curve is vertical at the full employment level because the market is always at equilibrium.
Answer-A
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The pre-Keynesian or classical economic theory viewed the
long-run aggregate supply curve for the economy to...
Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. A. the...
Describe the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. A. the SRAS curve is horizontal and the LRAS curve is upward sloping B. the SRAS curve is horizontal and the LRAS curve is vertical C. the SRAS curve is vertical and the LRAS curve is horizontal D. the SRAS curve is vertical and the LRAS curve is upward sloping Why is the short-run aggregate supply curve horizontal? A. because output is fixed in the short...
The economic model of aggregate demand curve and aggregate supply curve helps explain the A. three...
The economic model of aggregate demand curve and aggregate supply curve helps explain the A. three goals of economic policy which are economic growth, high inflation, and full employment. B. expansion and contractions in individual markets. C. shifts in real GDP and the price level. Which of the following descriptions reflects the AD-AS model most accurately? A. Real GDP is shown on the vertical axis and the price level is shown on the horizontal axis. B. Aggregate supply is shown...
The figure below depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.
The figure below depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.One of the most contentious issues among economists involves the economy’s adjustment to long-run equilibrium. Some economists believe that adjustment can and should occur naturally. This group, the classical economists, stress the importance of aggregate supply. Others see the return to long-run equilibrium as an...
The long run aggregate supply curve is perfectly vertical to both the RBC and New keynesian...
The long run aggregate supply curve is perfectly vertical to both the RBC and New keynesian models of inflation and economic growth. this implies that a. inflation and long run supply and positively correlated b. sthe slope of the LRAS curve is negative c. there is no relationship between long run growth and inflation d. all of the possible choices are correct money neutrality implies that a. all the possible choices are correct b. increaes in the money supply have...
The figure below depicts the aggregate demand curve (AD) and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.
The figure below depicts the aggregate demand curve (AD) and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.One of the most contentious issues among economists involves the economy’s adjustment to long-run equilibrium. Some economists believe that adjustment can and should occur naturally. This group, the classical economists, stresses the importance of aggregate supply. Others see the return to long-run equilibrium as an adjustment that occurs unpredictably and often...
When the aggregate demand curve and the short-run aggregate supply curve intersect, a) the long-run aggregate...
When the aggregate demand curve and the short-run aggregate supply curve intersect, a) the long-run aggregate supply curve must also intersect at the same point. Ob) the economy must experience higher output than the natural level of output. o c) the economy must experience lower output than the natural level of output. o d) the economy is in short-run macroeconomic equilibrium. In a small economy in 2016, aggregate expenditure was $900 million while GDP that year was $750 million. Which...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward sloping. is horizontal. is vertical at potential GDP
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this...
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this represent? o the liquidity theory O a liquidity trap O the classical dichotomy O constant returns to scale QUESTION 8 Why might prices be inflexible in the short run? O sticky wages O sticky prices O missperceptions o all of the above
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of...
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of the price level. ob. actual output can never exceed, even temporarily, the output rate implied by the economy's long-run aggregate supply curve. c. a vertical long-run aggregate supply curve indicates the maximum output rate that an economy can ever reach. d. a vertical long-run supply curve indicates that an increase in aggregate demand will lead to a
The shape of the long-run aggregate supply curve suggests that
The shape of the long-run aggregate supply curve suggests that Potential GDP is the amount of output that can be produced if the economy is operating at maximum capacity Potential GDP is independent of the average price level Potential GDP is positively related to the average price level Potential GDP is negatively related to the average price level
When the aggregate demand curve and the short-run aggregate supply curve intersect, a) the long-run aggregate supply curve must also intersect at the same point. Ob) the economy must experience higher output than the natural level of output. o c) the economy must experience lower output than the natural level of output. o d) the economy is in short-run macroeconomic equilibrium. In a small economy in 2016, aggregate expenditure was $900 million while GDP that year was $750 million. Which...
The Long-Run Aggregate Supply Curve: is vertical at the physical limit of the economy. is upward sloping. is horizontal. is vertical at potential GDP
QUESTION 7 The long run aggregate supply curve (LRAS) is vertical. What economic theory does this represent? o the liquidity theory O a liquidity trap O the classical dichotomy O constant returns to scale QUESTION 8 Why might prices be inflexible in the short run? O sticky wages O sticky prices O missperceptions o all of the above
The long-run aggregate supply curve is vertical because Select one: a. potential GDP is independent of the price level. ob. actual output can never exceed, even temporarily, the output rate implied by the economy's long-run aggregate supply curve. c. a vertical long-run aggregate supply curve indicates the maximum output rate that an economy can ever reach. d. a vertical long-run supply curve indicates that an increase in aggregate demand will lead to a
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