If the economy is on the flat part of the aggregate supply curve, expansionary fiscal policy works well to increase output with little increase in the price level.

Frictional unemployment is often thought to explain relatively long spells of unemployment

a. True b. False Indicate whether the statement is true or false

The table below shows how the payoffs to two political candidates depend on whether the candidates run a positive or negative campaign. The payoffs are given in terms of the percentage change in the number of votes received. Suppose that the Republican candidate tells the Democratic candidate that he intends to run a positive campaign. The likely result is that:

A. the Republican candidate will run a positive campaign, and the Democratic candidate will run a negative campaign. B. both candidates will run a negative campaign. C. the Republican candidate will run a negative campaign, and the Democratic candidate will run a positive campaign. D. both candidates will run a positive campaign.