In the Keynesian model with both a variable price level and money wage, the aggregate supply function will be
a. upward sloping but flatter than for the variable-price/fixed-wage version of the model.
b. upward sloping but steeper than for the variable-wage/fixed-price version of the model.
c. vertical.
d. horizontal.
B
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Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month. Using the midpoint formula, the ________ percent change in price led to a ________ percent change in the quantity demanded
A) 12.5; 10.5 B) 13.3; 10.0 C) 11.8; 11.1 D) 8.0; 9.5 E) None of the above answers is correct.
In a graph that illustrates a perfectly competitive firm, marginal revenue is
A) a diagonal line that lies below the firm's demand curve. B) a line that intersects the firm's demand curve from below at its lowest point. C) the same as the firm's demand curve. D) a line that intersects the firm's average total cost curve from below at its lowest point.