We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. In the long run
A) technology is fixed but it is not in the short run.
B) the price level is constant but in the short run it fluctuates.
C) the aggregate supply curve is horizontal while in the short run it is upward sloping.
D) real GDP equals potential GDP.
D
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Economic variables that generally turn down after a recession begins and turn back up after the recovery starts are called:
A) leading indicators. B) coincident indicators. C) lagging indicators. D) none of the above.
According to the budget philosophy of functional finance, _____
a. the budget should be balanced annually b. surpluses should be run during periods of prosperity and deficits should be run during recessions c. the government budget should be whatever is necessary to have the economy operate at potential GDP d. the budget should never be in balance e. the rate of growth in the national debt should equal the rate of growth in the money supply