Author Question: The rate at which aggregate supply changes to restore equilibrium at potential output depends ... (Read 142 times)

ENagel · **on:** Jun 30, 2018

The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on:
a. how quickly planned investment spending adjusts to changes in population growth.
b. how quickly planned consumption spending adjusts to changes in the price level and nominal wages.
c. how quickly technology changes to increase aggregate supply.
d. whether the economy is experiencing a recessionary gap or an expansionary gap.
e. how quickly real wages adjust to restore full employment in the labor market.

Question 2

For a given increase in aggregate demand, the steeper the short-run aggregate supply curve:
a. the larger the increase in investment expenditure.
b. the smaller the increase in the price level.
c. the smaller the increase in real GDP.
d. the larger the increase in real GDP.
e. the smaller the increase in real interest rate.