Market power in the United States causes a huge loss of economic efficiency

Figure 10-15

The economy's short-run (SRAS ) and long-run (LRAS) aggregate supply curves are shown in , along with three alternative aggregate demand curves and the accompanying equilibrium points. At which point will resource prices naturally tend to increase?
a.
A
b.
B
c.
C
d.
D

Which of the following is a practical question to implementing Keynesian economic policies to stimulate the economy?

a. Does the government know whether it is better to increase spending or increase taxes? b. Does the government know whether it is better to cut spending or cut taxes? c. Does the government know when there is cyclical unemployment? d. Does the government accurately know what the country’s potential GDP is?