« previous next »

Author Question: Explain why the short-run supply curve is not vertical, but the long-run aggregate supply curve is ... (Read 186 times)

809779

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
Explain why the short-run supply curve is not vertical, but the long-run aggregate supply curve is vertical.

Question 2

_____ are elements of fiscal policy that automatically change in value as national income changes.
 a. Statistical discrepancies
  b. Exchange rates
  c. Budget deficits
  d. Automatic stabilizers
  e. Supply-side shocks


xoxo123

  • Sr. Member
  • ****
  • Posts: 335
Reply #1 on: Jun 30, 2018
Answer to Question 1

Over the short run, suppliers are willing to supply more real output if the price level is increasing. This is due to the two possible explanations offered in the text: the profit effect and the misperception effect. The short-run aggregate supply curve is upward sloping, and responsive to the price level; the long-run aggregate curve is perfectly vertical and unresponsive to changes in the price level, as these two effects are absent in the long run.

Answer to Question 2

d


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Intussusception. A short length of small intestine has telescoped into itself. Intussusception. A short length of small intestine has telescoped into itself.
Components of a long bone. The entire long bone is on the left side accompanied by a blowup of the p Components of a long bone. The entire long bone is on the left side accompanied by a blowup of the p
The Light Curve of a Nova The Light Curve of a Nova
Solution (Polynomial Long Division) Solution (Polynomial Long Division)
Thermodynamic Diagrams and Vertical Temperature Profiles Thermodynamic Diagrams and Vertical Temperature Profiles
Blood Supply to the Lungs Blood Supply to the Lungs
Video: Passive Smoke Exposure

For a complete list of videos, visit our video library