The long-run aggregate supply curve is Select one: O a.a vertical line through the non-inflationary rate of output. O b.a vertical line through the natural rate level of output. O ca horizontal line through the current level of output. d. a vertical line through the current level of output.

The long-run aggregate supply curve is Select one: O a.a vertical line through the non-inflationary rate of output. O b.a vertical line through the natural rate level of output. O ca horizontal line through the current level of output. d. a vertical line through the current level of output.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 7QR

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Question

The long-run aggregate supply curve is
Select one:
O a.a vertical line through the non-inflationary rate of output.
O b.a vertical line through the natural rate level of output.
O ca horizontal line through the current level of output.
d. a vertical line through the current level of output.

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The short-run aggregate supply curve has: O A. a positive slope because as the inflation rate increases, so does the quantity of output supplied. OB. a positive slope because as the inflation rate increases, the quantity of output supplied decreases. C. a negative siope because as the inflation rate increases, the quantity of output supplied decreases. O D. a negative slope because as the inflation rate increases, so does the quantity of output supplied.
S Which of the following is true of a recessionary gap? O a. In the long run, this gap closes when the aggregate demand curve shifts rightward. b. It measures the amount by which actual output is greater than an economy's potential output. O c. It develops when the expected price level is less than the actual price level. O d. In the long run, this gap closes when resource suppliers negotiate lower resource payments. Oe. In the long run, this gap closes when the short-run aggregate supply curve shifts leftward. prt sc oooo O Icon Key II 1 FB
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If Aggregate Demand is at AD2, production will be high as possible. Can production stay at this level foever? Price Level Price Level GDP POTENTIAL AD₁ GDP POTENTIAL AS GDP MAX AD₁ AS GDP MAX AD2 GDP AD2 GDP Select one: O a. No, because eventually, higher aggregate demand will raise prices, and this will make some people less willing to do additional work Oc. All of these are true Od. Yes, because this is maximum production e. None of these are true O b. No, because eventually higher aggregate demand will cause prices to fall, and this will make producers decide to produce less
11
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