Privatization refers to the process of hiring private management consultancy firms to manage state-owned enterprises.

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

A) The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages. B) The aggregate demand curve shifts to the right during most periods. C) Aggregate demand and potential real GDP decrease continuously. D) Potential real GDP increases continuously.

Moving along the supply curve for labor, increases in the quantity of labor result from ________

A) diminishing returns to labor effort B) a rising cost of leisure C) a reduced preference for leisure D) more efficient recruitment of workers