When resource prices are negotiable, the long-run aggregate ...

[cdr_15]

When resource prices are negotiable, the long-run aggregate supply curve is represented by:
 a. an upward-sloping line
 b. a downward-sloping line
 c. a vertical line at potential output.
 d. a horizontal line at the actual price level.
 e. a horizontal line at the expected price level.

Question 2

To eliminate a recessionary gap, the Fed can:
 a. increase the money supply as it will increase the interest rate and investment.
 b. increase the money supply as it will decrease the interest rate and increase investment.
  c. decrease the money supply as it will increase the interest rate and investment.
 d. decrease the money supply as it will decrease the interest rate and investment.
 e. decrease the money supply as it will increase the interest rate and decrease investment.

[stano32]

Answer to Question 1

c

Answer to Question 2

b