The short-run aggregate supply curve is positive slopedbecause:
of diminishing returns to labor.

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workers care about nominal wages, not actual wages.
wages are sticky or don"t readily adjust to changes in economicconditions in the brief run.
business people suffer from money illusion.
12. Nominal wages are “sticky” because:
in the lengthy run all earnings become adjusted for inflation.
wages are slow to fall in the quick run when there room laborshortages and slow to rise even when there is far-reaching level ofunemployment.
wages continue to be fixed in the long run thereby boosting theprofitability the the firms.
wages are sluggish to rise in the brief run when there room laborshortages and slow come fall even when there is far-ranging level ofunemployment.
13. The level of output that the economic situation would produce if allprices, including nominal wages, were fully flexible iscalled:
real GDP.
Keynesian GDP.
structural GDP.
potential output.
14. When the economic climate is ~ above the short-run accumulation supply curve andto the left that the long-run aggregate supply curve, actualaggregate output will ultimately equal potential calculation as:
nominal incomes fall and also the long-run aggregate supply curveshifts to the left.
the aggregate price level falls and the long-run aggregatesupply curve shifts to the left.
nominal salaries fall and also the short-run aggregate supply curveshifts come the right.
the accumulation price level falls and the aggregate demand curveshifts come the right.
15. Figure: accumulation Supply
*

Reference: Ref 27-2

__(Figure: accumulation Supply) according to the Figure:Aggregate Supply, if the economic climate is at allude E:
actual calculation is much less than potential output.
actual output is an ext than potential output.
actual output is equal to potential output.
it is difficult to recognize the relationship in between actualand potential calculation without much more information.
16. A activity along the short-run AS curveoccurs, holding every little thing else constant, once there is a:
change in commodity prices.
supply shock.
change in the aggregate price level.
productivity change.
17. During the great Depression, the United claims experienced a________ the short-run aggregate supply curve; during the 1979 oilcrisis, the United says experienced a _________ in the short-runaggregate supply curve.
movement down along; a leftward shift
movement increase along; a leftward shift
movement increase along; a rightward shift
movement under along; a rightward shift
18. In the quick run, a positive need shock:
reduces accumulation output and increases the aggregate pricelevel.
increases accumulation output and also reduces the aggregate pricelevel.
reduces accumulation output and also the accumulation price level.
increases accumulation output and also the aggregate price level.
19. A an adverse short-run supply shock:
reduces accumulation output and increases the aggregate pricelevel.
increases aggregate output and reduces the aggregate pricelevel.
reduces both aggregate output and the accumulation pricelevel.
increases both accumulation output and also the accumulation pricelevel.
20. A diminish in accumulation demand will certainly generate _______ in realGDP and also _______ in the price level in the brief run.

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an increase; no change
a decrease; no change
a decrease; a decrease
no change; an increase

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As every the thedesigningfairy.com Policy, comment the very first four concerns 11. In the brief run, the prices and also wages room assumed to it is in rigid. They carry out not change according to the alters in the economic conditions. As result of this reason, output rises with increase in…View the full answer