In the goods market:
A. businesses produce goods and services and sells them to households and government.
B. government produces goods and services and supplies them to households and businesses.
C. households supply factors of production to businesses and are paid by businesses for doing so.
D. households supply goods to businesses and are paid by businesses for doing so.
Answer: A
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What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?
A) production of consumer goods B) real GDP C) production of capital goods D) the price level
The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that
A) there have been decreases in the growth rate while aggregate demand has remained unchanged. B) growth in aggregate demand has been greater than growth in aggregate supply. C) there have been decreases in aggregate demand while aggregate supply has remained unchanged. D) there have been increases in the growth rate while aggregate demand has remained unchanged.