c 800B 200B 19. If profit per unit- price-cost per unit and costs are temporaril

Question

c 800B 200B 19. If profit per unit- price-cost per unit and costs are temporarily fixed, the aggregate ply curve will have a positive slope b. a negative slope c. a basic "U" shape d. no slope at all 20. An increase in wages (or the price of any other major input) will cause the aggregate ply curve (SRAS) to (a.) shift upward b. shift downward c. become steeper d. become less steep 21. Iaggregate demand grows more rapidly than aggregate supply (SRAS), prices a, and GDP are both likely to rise b. are likely to rise but GDP is likely to fall c. and GDP are both likely to fall d. are likely to fall but GDP is likely to rise 22. The autonomic adjustment process for a recessionary gap would include: (1) a downward in the aggregate supply curve: (II) an upward shift in the consumption function. a. I and II b. I not II c. II not I d. neither I nor II The automatic adjustment process for an inflationary gap would include: (I) a movement up the aggregate demand curve; (II) an upward shift in the aggregate supply curve. a/ I and II b. I not II c. Il not I d. neither I nor II 23. The economy's self-correcting mechanism appears to be a. much more efficient at curing recessionary gaps through deflation than at curing inflationary gaps through inflation 24. much more eflficient at curing inflationary gaps through inflation than at curing recessionary gaps through deflation c. about equally efficient at curing recessionary gaps through deflation and at curing inflationary gaps through inflation d. unable to cure either recessionary or inflationary gaps

Explanation / Answer

19. A. Positive Slope

Explanation: Profit per unit = Price - Cost per unit. Also, costs are temporarily fixed. Therefore, increasing price will result in higher and higher profits and the firm would like to supply more with increasing price. So, the supply curve will have a positive slope.

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