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Explain whether the following statements are true or false:
a) The long run aggregate supply curve is vertical because economic forces do not affect long run aggregate supply.
b) The aggregate demand curve slopes downward because it is the horizontal sum of the demand curves for individual goods.
c) Whenever the economy enters a recession its long run aggregate supply curve shifts to the left.
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America can produce 100 shirts or 20 computers and China can produce 100 shirts or 10 computers. With trade, who exports shirts? Which country benefits from the trade?
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Is it true that government revenues are increased because of lower tax rates? Ans) It is true to a point. The Laffer curve determines that revenues enhance as the tax rates rise
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