Which of the following is not a reason why the U.S. economy has been more stable since 1950?
A) Unemployment insurance and other government programs curtail the decline in spending that occurs during a recession.
B) Services have become a larger fraction of GDP and goods have become a smaller fraction of GDP.
C) Goods have become a larger fraction of GDP and services have become a smaller fraction of GDP.
D) The government has actively pursued policy to combat recessions and prolong expansions.
C
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Decreases in the NAIRU represent a:
A) leftward shift in the aggregate demand curve. B) leftward shift of the long-run aggregate supply curve. C) rightward shift of the long-run aggregate supply curve. D) rightward shift in the aggregate demand curve.
A Detroit business advertises, "The more we sell, the lower the price, and the lower the price, the more we sell." This firm is experiencing
a. decreasing returns to scale. b. constant returns to scale. c. increasing returns to scale. d. abnormal demand patterns.