An aggregate supply curve represents the relationship between the:
A. Price level and the buying of real domestic output
B. Price level and the production of real domestic output
C. Real domestic output bought and the real domestic output sold
D. Price level that producers are willing to accept and the price level buyers are willing to pay
B. Price level and the production of real domestic output
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Suppose money supply (M) = $3,960 billion, price level (P) = 1.1, and real GDP (Y) = $7,200 billion. Calculate the value of velocity using the equation of exchange.
A) 1.6 B) 1.8 C) 2.0 D) 2.2
In the long run, if price is less than average cost
A) there is an incentive for firms to exit the market. B) there is no incentive for the number of firms in the market to change. C) there is profit incentive for firms to enter the market. D) the market must be in long-run equilibrium.