If Resource Prices Are "Sticky" Downward and a Recessionary Gap

question 3

Multiple Choice

If resource prices are "sticky" downward and a recessionary gap develops in an economy, the short-run aggregate supply curve will _____

• A) shift leftward to return the economy to its potential output.
• B) shift rightward to return the economy to its potential output.
• C) become a horizontal straight line.
• D) not shift rightward to return the economy to its potential output.
• E) become the long-run aggregate supply curve.

Analyze the effects of minimum wage laws on the supply and demand for labor.

Understand the impact of natural disasters on market prices and their role in resource allocation.

Comprehend the significance of government intervention in markets through price controls and its effects on supply and demand equilibrium.

Understand how price floors and price ceilings affect market equilibrium and lead to surpluses or shortages.

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Definitions:

Relatedness

The need to establish and maintain emotional bonds and interpersonal connections with others.

Growth

The process of increasing in size, amount, value, or importance.

Equity Theories

A set of theories in psychology and organizational behavior that focus on the principles of fairness and justice in social relationships, particularly in the workplace.

Social Exchange

A theory in social science that proposes human interactions are based on the exchange of goods, services, information, or emotional support, where the goal is to maximize benefits and minimize costs.