Along the Aggregate Supply Curve

question 33

Multiple Choice

Along the aggregate supply curve

• A)the horizontal part represents a situation where the economy is operating above full employment levels.
• B)inflation would be a primary concern along the horizontal part of the aggregate supply curve.
• C)idle resources,such as labor and capital,would be a feature of the vertical section of the aggregate supply curve.
• D)the horizontal section of the aggregate supply curve represents the limit of production.
• E)the middle,upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

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Definitions:

Exports

Products or services made in one country and purchased by consumers in a different country, adding to the exporting nation's overall economic output.

Interest Rates

The cost of borrowing money or the return for investing money, usually expressed as a percentage of the principal per period of time.

Tight Money Policy

A monetary policy strategy used by central banks to reduce the money supply and increase interest rates to control inflation.

Net Exports

The difference between a country's total value of exports and total value of imports. Positive net exports indicate a trade surplus, while negative net exports indicate a trade deficit.