In the IS-LM model, the implicit assumption made about aggregate supply was that the
a. aggregate supply schedule was vertical because prices were flexible.
b. aggregate supply schedule was horizontal because prices were fixed.
c. aggregate supply schedule was upward sloping to the right because wages and prices were fixed.
d. supply of output was fixed.
e. none of the above.
B
Economics
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Which of the following can prevent markets from reaching the efficient level of production? I. a monopoly II. taxes III. the product is a public good
A) I and II B) II C) II and III D) I, II and III
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The aggregate demand curve will shift to the right ________ the initial decrease in taxes
A) by less than B) by more than C) by the same amount as D) sometimes by more than and other times by less than
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