The horizontal short-run aggregate supply curve
A. assumes that wages and all other input prices are constant.
B. assumes that opportunity cost is constant.
C. assumes that there is full employment in the economy.
D. shows that real GDP can be increased only when prices increase.
Answer: A
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The understanding of why an economy is contracting during slowdowns and how to recommend appropriate policies is studied under:
A) macroeconomics. B) microeconomics. C) agricultural economics. D) international economics.
The degree of a factor's specificity is directly related to
A) the amount of time required to redeploy the factor to a different industry. B) the cost of the factor as a proportion of the long-run total cost of production. C) the mobility of the factor, with more mobile factors having more specificity. D) technology differences between two countries, with a more advanced technology resulting in more factor specificity. E) factor quality, with higher quality factors having a higher level of specificity.