If in the short run prices did not respond at all to changes in aggregate demand,the short-run aggregate supply curve would
A) be vertical.
B) be horizontal.
C) slope up.
D) slope down.
According to the new classical view,aggregate output will differ from full-employment output
A) whenever saving does not equal investment.
B) only if the actual price level does not equal the expected price level.
C) only if the federal government's expenditures are greater than its tax receipts.
D) whenever imports exceed exports.
Suppose a company expects prices in general to rise by 5%,but the price of its product rises by 2%.How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product.
B) It will increase production more slowly since it's price is rising more slowly than average.
C) It will reduce production since it perceives a relative decline in the demand for its product.
D) It will stop production and shut down until prices rise more quickly.
Which of the following is NOT a characteristic of competitive markets?
A) They produce a standardized product.
B) Purchases and sales of individual traders are small relative to the total volume traded.
C) Prices adjust quickly.
D) There are relatively few sellers.