Why does the short-run aggregate supply curve shift to the left in the long run, following an increase in aggregate demand?
A) Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices.
B) Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices.
C) Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices.
D) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices.
A
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A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is
A) 0.80. B) 1.20. C) 1.25. D) 8.00.
The GAP ratio is a measure of __________ risk
A) credit B) leverage C) interest rate D) liquidity