Make use of the misperceptions theory to explain why the short-run aggregate supply curve is upward sloping
What will be an ideal response?
Assume that all prices in an economy rise but relative prices do not change. If individual producers fail to recognize the situation, aggregate output increases. This change in output occurs because producers think that some of the increase in prices represents increases in their products' relative prices, and they increase the quantity of their products supplied. producers fail to recognize the situation, aggregate output increases. This change in output occurs because producers think that some of the increase in prices represents increases in their products' relative prices, and they increase the quantity of their products supplied.
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In the figure above, with the rent ceiling the quantity of housing supplied is ________ units, the quantity demanded is ________ units, and the quantity rented is ________ units
A) 3,000; 6,000; 3,000 B) 3,000; 6,000; 6,000 C) 3,000; 6,000; 4,000 D) 3,000; 3,000; 3,000 E) 4,000; 4,000; 4,000
If you go into a bank which faces a 10% required reserve ratio and borrow $1,000, the bank will ____ your checking account at the bank
a. add $1,000 to b. subtract $1,000 from c. add $5,000 to d. subtract $5,000 from