If a Macroeconomic Model Consists of Upward-Sloping Short-Run Aggregate Supply

question 9

Multiple Choice

If a macroeconomic model consists of upward-sloping short-run aggregate supply and downward-sloping aggregate demand,can it possibly generate a constant real GDP with no business cycles over time?

• A)No,only a vertical short-run aggregate supply curve can produce that result.
• B)No,only a horizontal short-run aggregate supply curve can produce that result.
• C)Yes,but the short-run aggregate supply curve must never shift.
• D)Yes,if the aggregate demand and short-run aggregate supply curves shift in perfect unison.

Understand the future value and present value concepts of annuities, including ordinary annuities and annuities due.

Ability to use financial tables or financial calculators to find present value (PV), future value (FV), present value of an annuity (PVA), and future value of an annuity (FVA).

Understand the impact of changing interest rates and time periods on future and present value calculations.

Apply understanding of future value and present value concepts to make informed financial decisions regarding loans, savings, and investments.

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Definitions:

Area Representation

The graphical depiction of quantitative relationships, often used in statistical and economic models to illustrate areas under curves or between lines.

Price

The price tag reckoned, necessitated, or conveyed in compensation for a particular thing.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive.

Price Falls

A decrease in the cost of goods or services in the market.