A Keynesian short-run aggregate supply curve has a flatter portion and a steep portion. How does a decrease in aggregate demand affect the actual real GDP differently across these two portions?

a. There is a large decrease in the actual real GDP across the flatter portion and a small decrease in the actual real GDP across the steep portion.
b. There is a large increase in the actual real GDP across the flatter portion and a small increase in the actual real GDP across the steep portion.
c. There is a small decrease in the actual real GDP across the flatter portion and a large increase in the actual real GDP across the steep portion.
d. There is a small increase in the actual real GDP across the flatter portion and a large increase in the actual real GDP across the steep portion.

a. There is a large decrease in the actual real GDP across the flatter portion and a small decrease in the actual real GDP across the steep portion.

Economics

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Recent research in growth theory extends the traditional analysis by making the rates of

a. technological change and/or population growth exogenous. b. technological change exogenous and population growth endogenous. c. population growth and/or technological change endogenous. d. population growth exogenous and technological change endogenous.

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If the price of a cup of coffee increases by 50 percent, the quantity demanded decreases by 50 percent. The price elasticity of demand is:

A. zero. B. elastic. C. unit elastic. D. inelastic.

Economics