Multiple Choice
In which of the following cases will the AS-curve be horizontal?
A) if nominal wages and prices always change proportionally, leaving real wages unchanged
B) if nominal wages do not change even if there is high unemployment
C) if nominal wages are completely flexible
D) if the economy is always in a full-employment equilibrium
E) if fiscal policy has no impact on the output level
Correct Answer:

Verified
Correct Answer:
Verified
Q25: The Keynesian AS-curve differs from the classical
Q26: An increase in aggregate demand can be
Q27: In the long run, as potential GDP
Q28: As nominal money supply is steadily increased
Q29: In a normal AD-AS diagram with an
Q31: When nominal money supply is held constant
Q32: Assume investment is very interest sensitive and
Q33: An increase in government purchases will NOT
Q34: The income velocity of money can be
Q35: Cutting income tax rates will most likely