If aggregate supply meets aggregate demand in the vertical part of the AS curve, which of the following is a true statement about expansionary policies?
A) Monetary policy will be more effective in increasing output.
B) Fiscal policy will be more effective in increasing output.
C) Fiscal and monetary policy will be equally effective in increasing output.
D) Both monetary and fiscal policies will only cause prices to increase.
D
You might also like to view...
The law of increasing opportunity cost implies that
A) producing additional units of one good results in proportionately smaller reductions in output of the other good. B) producing additional units of one good results in increasing amounts of lost output of the other good. C) the production possibilities curve will be a straight line. D) the society will be producing on its production possibilities curve.
Suppose a monopsonist currently employs 100 workers at a wage of $400 per week. If the firm wants to expand employment to 110 workers, and the 110th worker will only work for $450 per week, what is the approximate marginal factor cost of the 110th worker?
a. $450 per week. b. $5,500 per week. c. $950 per week. d. $9,500 per week. e. $49,500 per week.