Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease 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 accept lower wages and prices.
D) Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices.
C
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If national income is $100 billion, and MPC = 0.75, then autonomous consumption is ________ and MPS is ___________
a. $25 billion; 0.25 b. $75 billion; 0.75 c. unknown; 1.25 d. unknown; 0.25 e. $75 billion; 0.25
In the long run, which of the following depends primarily on the growth rate of the money supply?
a. the natural rate of unemployment and the inflation rate b. the natural rate of unemployment but not the inflation rate c. the inflation rate but not the natural rate of unemployment d. neither the natural rate of unemployment nor the inflation rate