Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?
A) The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages.
B) The aggregate demand curve shifts to the right during most periods.
C) Aggregate demand and potential real GDP decrease continuously.
D) Potential real GDP increases continuously.
C
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Over long time horizons, the more independent a country's central bank is,
A) the lower the inflation that country experiences. B) the better chance that country has of experiencing hyperinflation. C) the higher the country's unemployment rate tends to be. D) the more politically unstable the country becomes.
Canada is said to have an absolute advantage vis-à-vis the U.S. in the production of cod because it can produce cod
a. in larger quantities b. while the U.S. can't c. at a lower opportunity cost d. with fewer resources e. at a higher opportunity cost