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Most economists believe that real economic variables and nominal economic variables behave independently of each other in the long run.
For example, an increase in the money supply, a-------------- variable, will cause the price level, a---------------------- variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a----------------- variable. The notion that an increase in the quantity of money will impact the price level but not the output level is known as --------------------.
In the short run, however, most economists believe that real and nominal variables are intertwined. Economists use the model of aggregate demand and aggregate supply to examine the economy's short-run fluctuations around the long-run output level. The following graph shows an incomplete short-run aggregate demand (AD) and aggregate supply (AS) diagram—it needs appropriate labels for the axes and curves. You will identify some of the missing labels in the questions that follow.
The vertical axis of the aggregate demand and aggregate supply model measures the overall ---------------- .
The aggregate----------------------- curve shows the quantity of goods and services that firms produce and sell at each price level.
Divide the gain or loss by the number of years to maturity to calculate the average annual gain/loss. Calculate the yield to maturity on this bond.
If you match up pairs of buyers and sellers so as to maximize the total surplus of all transactions, what is the largest total surplus that can be achieved.
At a separating perfect Bayes-Nash equilibrium, what is the maximum amount of advertising that a restaurant conducts. What is the minimum amount.
Walmarts decision in 1994 to continue operating stores in specific cities in Mexico when other firms were pulling out would be classified as
How has Apple positioned itself to take advantage of unique designs to attract a sufficiently large niche market to surpass the competition in the United States and China? What does the Apple experience tell us about risks associated with strategic a..
Although there seems to be a great demand for your bread, why would productivity decline when you hire more labor in the short run?
Assuming that prices are set competitively (i.e. set equal to MC of producing services), show in a supply-demand graph how we could measure the “efficiency loss” (or deadweight loss) associated with health care over-consumption.
What will happen to equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties and fewer used textbooks are sold.
Firms that can identify two types of consumers can price-discriminate perfectly. Firms can price-discriminate only if there is zero competition in the market. Firms that price-discriminate will not reach higher profits.
Under the responsibility scheme proposed by the Taiwan government, households will be charged for solid waste disposal. Is this charge justifiable from an economics point of view?
A manufacturer has paid an engineering firm $200,000 to design a new plant, and it will cost another $2 million to build the plant. In the meantime, however, the manufacturer has learned of a foreign company that offers to build an equivalent plant f..
During the most recent recession General Motors and Chrysler lost huge sums of money in their operation (not counting government bailout money they could not assume they would get). How could they continue to operate at a loss?
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