What are the three time horizons used to categorize aggregate supply? What is the difference between the immediate short-run and the short-run aggregate supply?
What will be an ideal response?
The three time horizons used to categorize the aggregate supply curve are the immediate short run, the short run and the long run. In the immediate short run, both input and output prices are fixed, and the aggregate supply curve is horizontal. The aggregate supply curve in the short run is up sloping because the price of output could vary. The price of inputs, however, is also fixed in the short run. The main difference between the immediate short-run and the short-run aggregate supply is then the flexibility of output prices in the short run.
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The unemployment rate is the number of people unemployed divided by the
A) number of people employed, then multiplied by 100. B) working-age population, then multiplied by 100. C) labor force, then multiplied by 100. D) labor force participation rate, then multiplied by the population. E) population, then multiplied by 100.
When the real interest rate increases
A) the supply of loanable funds curve shifts rightward. B) the supply of loanable funds curve shifts leftward. C) there is a movement upward along the supply of loanable funds curve. D) there is a movement downward along the supply of loanable funds curve.