In the long-run, if the economy is operating at the full employment level, the equilibrium level of real GDP is determined solely by the:
a. level of unemployment in the economy.
b. rate of inflation in the economy.
c. real interest rate in the economy.
d. aggregate supply curve of the economy.
e. aggregate demand curve of the economy.
d
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If the U.S. dollar increases in value relative to other currencies, how does this affect the aggregate demand curve?
A) This will shift the aggregate demand curve to the right. B) This will move the economy down along a stationary aggregate demand curve. C) This will move the economy up along a stationary aggregate demand curve. D) This will shift the aggregate demand curve to the left.
Mars Inc produces 100,000 boxes of Snickers bars which sell for $4 a box. If variable costs are $3 per box, and it has $150,000 fixed operating costs, in the short run, it should
A) shut down as fixed costs are not being covered. B) keep producing as profits are $50,000. C) keep producing as variable costs are being met. D) keep producing as total costs are being recovered.