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:

Labor Rights

The protections and entitlements of workers, including the right to safe working conditions, fair wages, and freedom from discrimination, established by law and labor unions.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by high unemployment, significant declines in output and the standard of living, and widespread poverty.

New Deal

A series of programs, public work projects, and financial reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939 to help recover from the Great Depression.

World War II

A worldwide war that occurred between 1939 and 1945, engaging the majority of the globe's countries, comprising all of the major powers, which later divided into two antagonistic military coalitions: the Allies and the Axis.