Explain how the different views of the shape of the aggregate supply (AS) curve influence economists' perception of the impact that government actions have on Real GDP in the short run
Some economists believe that the AS curve is upward-sloping in the short run. With an upward-sloping AS, any government policy that stimulates aggregate demand will lead to an increase in Real GDP. These changes can occur from either the demand side of the economy or the supply side of the economy, giving the government more tools to use during difficult economic times. Those economists who believe that AS is vertical, think that government actions designed to change aggregate demand in the economy will lead to no change in Real GDP. They feel that changes in Real GDP come from the supply side of the economy, not the demand side. Therefore, the vertical-AS group thinks that the government has fewer tools capable of raising Real GDP than what the upward-sloping AS economists believe.
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Which of the following would likely occur if a larger number of highly skilled workers were allowed to immigrate to the U.S.?
a. The average wage for highly skilled workers would decline. b. The average wage for highly skilled workers would increase. c. The supply curve for highly skilled workers would shift to the left. d. The demand curve for highly skilled workers would flatten out.
When a baker exchanges a pie for dollars, this is an example of dollars serving as
A. a unit of account. B. a store of value. C. a medium of exchange. D. barter.