The Short-Run Aggregate Supply Curve Is Horizontal When

question 139

Multiple Choice

The short-run aggregate supply curve is horizontal when

• A) prices are inflexible and the economy is at full employment.
• B) there are unemployed resources and prices do not increase when aggregate demand increases.
• C) there are unemployed resources and prices do not decrease when aggregate supply increases.
• D) there are no unemployed resources and prices do not increase when aggregate demand or supply increases.

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Definitions:

Bonds

A form of interest-bearing notes payable issued by corporations, universities, and governmental entities.

Investing Activity

Transactions involving the purchase and sale of long-term assets and other investments not considered as cash equivalents.

Interest

Payment for the use of another person’s money.

Bonds Payable

Bonds payable refers to long-term debt instruments issued by a company to investors, promising to pay back with interest at specified maturity dates.