The short-run aggregate supply curve in modern Keynesian analysis represents the relationship between
A) the real output of goods and services in the economy and the price level when people have fully adjusted their behavior.
B) the nominal output of goods and services and the real output of goods and services.
C) the real output of goods and services in the economy and the price level.
D) the real output of goods and services in the economy and the price level when people have not fully adjusted their behavior.
D
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Refer to the diagram. Initially assume that the investment demand curve is ID 1 . Which of the following effects of financing a large public debt might shift the investment demand curve from ID 1 to ID 2 , wholly offsetting any crowding-out effect?
A. An improvement in profit expectations by businesses.
B. A decrease in saving.
C. A decline in the interest rate.
D. An increase in the marginal propensity to consume.
Arlo has just completed a study that shows a large number of workers are not doing the jobs that best use their talents. Which point on the production possibilities curve represents this fact?
a. A
b. B
c. C
d. D