Ch 19: Business Cycles, Unemployment and Inflation
The Long Run Aggregate Supply curve represents the goal of the economy, and it is represented by a vertical line. What kind of output is it displaying?
Full employment output
New college graduates still looking for their first jobs would be classified in the BLS data as
frictionally unemployed
The Short Run Aggregate Supply curve represents where the economy is currently. Is it (1) a downward-sloping curve (2) an upward-sloping curve or (3) a vertical line?
The Short Run Aggregate Supply curve represents where the economy is currently. Is it (1) a downward-sloping curve (2) an upward-sloping curve or (3) a vertical line?
Assume that an increase in a household's disposable income from $40,000 to $48,000 leads to an increase in consumption from $35,000 to $41,000.This means that the household’s marginal propensity to consume
is 0.75