The long run market supply curve is formed by adding up individual firm supply curves in the industry.
Answer the following statement true (T) or false (F)
False
Rationale: This is true for short-run market supply curves. Long run market supply curves are formed through the process of entry and exit of firms.
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If the value of the spending multiplier is greater than 1, then an increase in investment will shift the aggregate demand curve to the left
a. True b. False Indicate whether the statement is true or false
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP rises, and nominal value of the domestic currency falls. b. Real GDP falls, and nominal value of the domestic currency rises. c. Real GDP rises, and the nominal value of the domestic currency remains the same. d. Real GDP rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.