To Keynesians, a vertical aggregate supply curve
A) is nonsensical.
B) holds in the short run but not the long run.
C) holds in the long run but not the short run.
D) will only be encountered at the full-capacity output of the economy.
C
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The quantity of newspapers sold will decline if: a. newsprint becomes more expensive
b. the printers' union makes wage concessions. c. newspaper prices are reduced. d. magazine prices rise.
Labor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow." How does this work?
A) If the price of labor falls, the supply of goods rises, and the prices of those goods fall. B) If the price of labor falls, the quantity supplied of goods rises, and the prices of those goods fall. C) If the price of labor falls, the demand for goods falls, and the prices of those goods fall. D) If the price of labor falls, the demand for goods rises, and the prices of those goods fall. E) If the price of labor falls, the supply of goods falls, and the prices of those goods fall.