If the price level in the current year is much higher than the expected price level, _____
a. firms will increase production beyond the economy's potential level
b. the unemployment rate will increase
c. firms will decrease production below the economy's potential level
d. the short-run aggregate supply curve will become steeper
e. the unemployment rate will fall to zero
a
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Aggregate income equals: a. the sum of income earned by all laborers in the world economy
b. the sum of income earned by all workers in the private sector. c. the sum of the income earned by all the resource suppliers in an economy. d. the total income of all employees after payment of income tax. e. the total income of all employees after purchases of necessities.
Refer to the supply and demand graph below. In the graph, line S is the current supply of this product, while line S1 is the optimal supply from the society's perspective. This figure suggests that there is (are):
A. External benefits from the production of this product
B. External costs in the production of this product
C. Currently an underallocation of resources toward producing this good
D. Positive externalities from producing the good