Under the assumptions of the new Keynesian model, an increase in aggregate demand will
A) increase prices and output in the short-run.
B) lead to a decrease in unemployment and an increase in prices in the short run.
C) lead to an increase in the nominal wage rate in the long run and a decrease in unemployment in the short run.
D) All of the above are correct.
D
Economics
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At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.
a. true b. false
Economics
Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because
A) car sellers would never lie. B) car buyers are gullible. C) the signal cannot be false. D) a false signal can be costly to the seller.
Economics