The potential output of an economy is the level of output produced when the:
a. real wage equals the nominal wage
b. price level is constant.
c. expected real wage equals the nominal wage.
d. seasonal unemployment rate is zero.
e. expected price level equals the actual price level.
e
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If the price of oil, a close substitute for coal, increases then the
A. supply curve for coal will shift to the right. B. demand curve for coal will shift to the right. C. equilibrium price and quantity of coal will not change. D. demand curve for coal will shift to the left. E. supply curve of coal will shift to the left.
The foreign purchases effect on aggregate demand suggests that a ________.
A. rise in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand B. fall in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand C. rise in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand D. fall in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand