When the Aggregate Supply Curve Is Horizontal

question 138

Multiple Choice

When the aggregate supply curve is horizontal,

• A) many firms are likely to have excess capacity.
• B) the economy is close to full capacity.
• C) resources are being utilized at full capacity.
• D) the prices level increases with additional production.

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Definitions:

Semiconductor Materials

Materials that have electrical conductivity between that of a conductor and an insulator, used in the manufacture of electronic devices, including silicon and germanium.

Piezoelectricity

The production of electricity by applying pressure to a crystal.

Pressure

The force applied perpendicular to the surface of an object per unit area over which that force is distributed.

Strict Constructionists

Individuals who interpret the Constitution in a literal and narrow way, often limiting the powers of the federal government.