D Question 38 1 pts Why is the economy at full employment in the long run? O Wag
ID: 1112695 • Letter: D
Question
D Question 38 1 pts Why is the economy at full employment in the long run? O Wages and the price level eventually adjust to develop full employment. O Only wages have the ability to adjust. O Wages don't adjust O Only price can adjust. O Prices don't adjust. DQuestion 39 1 pts In the short-run, a temporary increase in money supply O shifts the AA curve up, increases output and depreciates the currency. O shifts the AA curve to the left, increases output and depreciates the currency. O shifts the AA curve to the left, decreases output and depreciates the currency. O shifts the AA curve to the left, increases output and appreciates the currency O shifts the DD curve to the right, increases output and appreciates the currency. D Question 40 1 pts The DD schedule shows all combinations of which 2 variables so that the output market is in equilibrium? imports and exports foreign prices and the exchange rate output and exports exports and the exchange rate output and the exchange rateExplanation / Answer
(Question 38) Option (1)
In the long run, prices and wages are fully flexible and therefore they both adjust to ensure full employment.
(Question 40) Option (1)
A temporary increase in money supply shifts the AA curve upward and right, which increases output and causing a depreciation of domestic currency.
(Question 40) Option (5)
The DD curve shows the relationship between GNP (Output) and exchange rate.
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