Question : The aggregate supply, in the long run, is primarily determined by:
Option 1: Resource price
Option 2: Technology
Option 3: Government Policies
Option 4: Interest rates
Correct Answer: Resource price
Solution : The correct answer is (a) Resource prices.
While technology does play a significant role in influencing long-run aggregate supply, it is the availability and cost of resources, including labor, capital, land, and raw materials, that ultimately shape an economy's production capacity in the long term.
Therefore, in the long run, changes in resource prices, such as fluctuations in wages, energy costs, or the prices of raw materials, have a more significant influence on the aggregate supply curve. Government policies and interest rates can also impact resource availability and costs, but their effects are mediated through their impact on resource markets.
Question : The long-run aggregate supply curve is primarily determined by:
Option 1: Labor market conditions
Option 2: Price level
Option 3: Government policies
Question : The aggregate supply curve in the short run is mainly influenced by:
Option 1: Resource prices
Question : In a floating exchange rate system, the exchange rate is determined by market forces, and fluctuations in the rate are caused by changes in ________.
Option 1: government policies
Option 2: inflation rates
Option 3: interest rates
Option 4: supply and demand
Question : In a floating exchange rate system, exchange rates are determined by:
Option 1: Market forces of supply and demand
Option 2: Government intervention
Option 3: Central bank policies
Option 4: Fixed exchange rates
Question : In the long run, the aggregate supply curve is:
Option 1: Vertical
Option 2: Horizontal
Option 3: Upward-sloping
Option 4: Downward-sloping
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile