Author Question: Last year there were 6 pizza shops in town. This year there are only 4. Other things being equal, ... (Read 130 times)

nautica902 · **on:** Jun 29, 2018

Last year there were 6 pizza shops in town. This year there are only 4. Other things being equal, the decrease in the number of suppliers will

A) cause the market supply curve to shift to the right.
B) increase the market demand for pizza.
C) cause a decrease in the quantity supplied at each price.
D) have no impact on market supply as long as the demand for pizza remains strong.

Question 2

Which of the following is a basic difference between the classical model and the Keynesian model in which the Keynesian short-run aggregate supply curve exists?

A) The classical model assumes that the long run aggregate supply curve is vertical, while the Keynesian model assumes the long run aggregate supply curve is horizontal.
B) The classical model assumes that the position of the long run aggregate supply curve is determined by full employment, while the Keynesian model assumes that the long run aggregate supply curve will be to the left of full employment.
C) The classical model assumes that the level of real GDP is supply determined, while the Keynesian model assumes that it is demand determined.
D) The classical model uses real GDP, while the Keynesian model uses nominal GDP.

krakiolit · **Reply #1 on:** Jun 29, 2018

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