Which one of the following statements is TRUE?
A. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that there is no correlation between the level of real GDP and the employment level.
B. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that domestic workers are harmed by imports.
C. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that increases in aggregate demand will increase the price level, but will leave real GDP unaffected in the short term.
D. The shape of the Keynesian short-run aggregate supply curve is based on the conclusion that increases in aggregate demand can boost output in the short term.
Answer: D
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One important difference between the political process and the market process is that
A) the political process results in collective actions that maximize economic surplus, while the market process may lead to efficiency losses. B) the political process results in collective actions in which everyone is made better off, while the market process results in actions that favor some groups only. C) the political process results in collective actions in which not everyone is required to participate, while in the market process individuals are obliged to participate. D) the political process results in collective actions in which everyone is obliged to participate, while in the market process individuals are free to participate or not.
Fred Monroe is a fisherman in the perfectly competitive fish industry in northern Minnesota. After years of experience, he knows that the demand curve for the fish he sells is
a. horizontal b. vertical c. downward sloping d. the same as the industry demand e. upward sloping