The Curve That Is Sometimes Called the "Long-Run Aggregate Supply

question 29

Multiple Choice

The curve that is sometimes called the "long-run aggregate supply curve" (vertical Y*) relates the aggregate price level to real GDP

• A)in the short run.
• B)when wages are in adjustment but prices are unstable.
• C)when national income is at less than potential income.
• D)when technology is allowed to change.
• E)after factor prices have fully adjusted to eliminate output gaps.

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Definitions:

Actor/Observer Bias

The tendency to attribute one's own actions to external causes while attributing others' actions to their personality.

Self-Fulfilling Prophecy

A situation where an individual's expectations or the expectations of others lead to behaviors that cause those expectations to come true.

Ingroup/Outgroup Bias

The tendency to favor members of one's own group (the ingroup) over those in other groups (the outgroup), often leading to prejudice and discrimination.

Self-Fulfilling Prophecy

A belief or expectation that influences behavior in a way that causes the belief to become true.