The reason the short-run macro model suggests that the economy can operate either above or below its potential while in the long-run classical model the economy operates automatically at full employment is that
a. the short-run macro model is flawed and inaccurate
b. the classical model is flawed and inaccurate
c. the two models measure completely different aspects of the economy
d. in the short run, spending affects output, but not in the long run
e. in the short run the role of government in helping the economy return to equilibrium is not considered
D
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If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per person
A) falls. B) rises. C) does not change. D) might rise, fall, or not change. E) cannot be measured.
A firm in ________ will engage in ________ to try to earn an economic profit
A) perfect competition; advertising B) monopolistic competition; product differentiation C) perfect competition; price wars D) monopolistic competition; price wars