In macroeconomic modelling, as price flexibility increases ________
A) the short-run aggregate supply schedule will get flatter
B) the short-run aggregate supply schedule will get steeper
C) the short-run aggregate supply schedule will shift to the right
D) the short-run aggregate supply schedule will shift to the left
B
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Why does economic theory predict that a perfectly competitive firm will produce at the point where price equals marginal cost?
a. This point provides an efficient allocation of society's resources. b. This point results in zero economic profit. c. This point maximizes profit for the firm. d. This point will minimize ATC for the firm.
Which of the following statements is true if interest rates were zero?
A) The demand for bonds increases because bonds will be a more attractive alternative to money. B) People will hold their wealth in the form of money rather than in bonds. C) Bonds and money will become perfect substitutes since both are non-interest earning assets. D) The supply of bonds will increase.