Author Question: If the economy is operating at a point at which short-run aggregate supply is horizontal, then A) ... (Read 37 times)

Mr. Wonderful · **on:** Jun 29, 2018

If the economy is operating at a point at which short-run aggregate supply is horizontal, then

A) real GDP cannot expand.
B) real GDP cannot contract.
C) increases in aggregate demand do not increase the price level.
D) then increases in aggregate demand do not increase real GDP.

Question 2

All of the following are characteristics of a monopolistically competitive industry EXCEPT

A) homogeneous products.
B) many firms.
C) low barriers to entry and exit.
D) sales promotion and advertising.