The economy's AS curve is often assumed to be relatively flat at low levels of real GDP.The underlying reasoning is that
A) consumer demand for most goods tends to be non-responsive to price when output is low.
B) consumer demand for most goods tends to be very responsive to price when output is low.
C) at low levels of output,firms are faced with unused capacity and thus can increase output without significantly increasing their costs.
D) the price level is constant.
E) profits are normally high in this section of the AS curve,so firms are willing to expand output.
Correct Answer:
Verified
Q66: The economy's aggregate supply curve is drawn
Q67: Consider the basic AD/AS model.Suppose that high-school
Q68: Which of the following is implied by
Q69: Which of the following could cause the
Q70: Which of the following is implied by
Q72: Which of the following could cause a
Q73: In building a macro model with an
Q74: Consider the economy's aggregate supply curve.Other things
Q75: Consider the basic AD/AS model.Suppose that a
Q76: Consider the basic AD/AS model.If major labour
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents