In the macroeconomy, demand-side shifts change:
A. aggregate demand only, which is why the price level remains unaffected in the long run.
B. only the output level in the long run, while prices eventually return to their long-run potential levels.
C. only the price level in the long run, while output eventually returns to its long-run potential level.
D. aggregate demand only, which eventually shifts back in the long run.
Answer: C
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A business cycle trough is a
A) small positive deviation from trend in real GDP. B) relatively large positive deviation from trend in real GDP. C) small negative deviation from trend in real GDP. D) relatively large negative deviation from trend in real GDP.
If the electric company is allowed by regulators to earn only a normal profit, it will produce at the point where
a. MR = MC b. P = MC c. MC = quantity demanded d. P = AC e. MR = AC