Chapter 10.1
The short-run aggregate supply curve shows:
a direct relationship between the price level and the quantity of real GDP supplied
The term "short run" refers to:
a period of time during which some resource prices remain fixed.
The natural rate of unemployment prevails when:
cyclical unemployment is zero
The _____ measures a worker's earnings in today's dollars, or the amount on a worker's paycheck, while the _____ measures the wage in constant dollars, or the purchasing power of the worker's earnings.
nominal wage; real wage
In the short run, there is a direct relationship between:
the actual price level and the real GDP supplied, other things remaining constant
The higher the price level, _____.
the lower the real wage and the less attractive that wage is to workers
If the firms produce beyond an economy's potential output level, _____.
the nominal cost of labor increases in the short run
At higher rates of output, _____.
the per-unit cost of additional output increases
The natural rate of unemployment refers to:
the unemployment rate that occurs when an economy's real GDP is equal to its potential output.
If an economy produces its potential output level, _____.
there is no tendency for price or output to change