Refer to the graph below. Assume the economy is at the initial position of B2. An increase in aggregate demand with no corresponding change in inflation expectations and wage rates will tend to:
A. Temporarily move the economy to point B3
B. Temporarily move the economy to point C2
C. Temporarily move the economy to point C1
D. Have no effect in shifting the economy from point B2
B. Temporarily move the economy to point C2
Economics
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How is it possible for the economy to have a recessionary gap?
a. Equilibrium is at a GDP level below full employment. b. Equilibrium is at a GDP level equal to full employment. c. Equilibrium is at a GDP level above full employment. d. GDP is rising at full employment. e. GDP is falling at full employment.
Economics
In the long run, a firm can change
A) nothing. B) only one input, such as plant size. C) all inputs. D) None of the above are correct.
Economics