Multiple Choice
The potential output line is:
A) vertical because it shows that a higher price level will not bring about higher output.
B) vertical because it shows that a higher price level will bring about higher output.
C) horizontal because it shows that a higher price level will not bring about higher output.
D) horizontal because it shows that a higher price level will bring about higher output.
Correct Answer:

Verified
Correct Answer:
Verified
Q77: The interest-rate and wealth effects are important
Q78: Fiscal policy and/or monetary policy:<br>A) change aggregate
Q79: Estimates in recent years put the natural
Q80: The substitution (trade-effect) shows that:<br>A) an increase
Q81: An unemployment rate greater than the natural
Q82: During the recessions of the early 1980s
Q84: As the price level falls, the holders
Q85: The aggregate demand - aggregate supply model
Q86: A recessionary gap refers to the:<br>A) amount
Q87: If potential output exceeds aggregate demand:<br>A) an