"As the economy moves upward along its aggregate supply curve, the economy also moves upward along its short-run Phillips curve." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
The statement is correct. As the economy moves upward along its aggregate supply curve, the price level rises so that there is inflation. And as the economy moves upward along its aggregate supply curve, real GDP increases so that the unemployment rate decreases. Therefore moving upward along the aggregate supply curve is associated with inflation and lower unemployment, which is what we see when we move along the short-run Phillips curve.
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A) a command system. B) an incentive system. C) a system that encourages managers to become agents that monitor their principals. D) economies of scope.
The optimum level of pollution emissions
A) is zero. B) occurs where the marginal external benefit is zero. C) occurs where no damage to the environment is being done. D) occurs where the marginal external benefit equals the marginal external cost. E) occurs where the marginal external cost equals the marginal cost of abatement.