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Aggregate supply in macroeconomics

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Aggregate supply reflects billions of production decisions made by:

consumers when they decide which products to purchase.
households and firms, because they each demand goods and services.
the largest firms and largest households.
households, which demand resources, and firms, which supply resources.
resource suppliers and firms.

In the long run, equilibrium output:

occurs when the economy has high levels of unemployment.
equals aggregate supply, and the equilibrium price depends on the aggregate demand curve.
is when actual aggregate expenditures equal real GDP.
occurs when inventories of goods and services are increasing.
occurs when wages are sticky.

If the MPC < 1 and a household's disposable income increases by $2,000, the household's consumption will:

increase by less than $2,000.
increase by $2,000.
decrease if the family was wealthy before the income change.
remain the same unless the change in income significantly affects the household's wealth.
remain the same.

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Aggregate supply reflects billions of production decisions made by:

resource suppliers and firms. ...

Solution Summary

Aggregate supply is clearly defined.

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