If a macroeconomic model consists of upward-sloping short-run aggregate supply and downward-sloping aggregate demand, can it possibly generate a constant real GDP with no business cycles over time?
A) No, only a vertical short-run aggregate supply curve can produce that result.
B) No, only a horizontal short-run aggregate supply curve can produce that result.
C) Yes, but the short-run aggregate supply curve must never shift.
D) Yes, if the aggregate demand and short-run aggregate supply curves shift in perfect unison.
D
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What effect does an increase in the interest rate have on the opportunity cost of holding money and on the demand for money curve?
What will be an ideal response?
Situation 35-2 ? Dan and Ann live in the same community and both can participate in two activities, producing and stealing. Refer to Situation 35-2. Ann spends 8 hours of each day producing and 1 hour of each day stealing. It is probably the case for her that
A. at some point the MB/MC ratio for producing fell below the MB/MC ratio for stealing. B. her MB/MC ratio for producing was always greater than her MB/MC ratio for stealing. C. her MB/MC ratio for producing never changed, no matter how much or how little she produced. D. her MB/MC ratio for stealing never changed, no matter how much or how little she stole. E. There is not enough information to answer the question.