The short-run aggregate supply curve shows that a change in inflation will cause (a) change(s) in ________. A) output B) potential output C) expected inflation D) price shocks E) all of the above ANSWER C
Date: September 10th, 2020
The IS curve slopes upward because a. as income rises, savings rise and consumption falls, decreasing output. b. as interest rates rise, the money supply rises, increasing output. c. as interest rates rise, planned investment must fall, increasing output. d. as income increases, money demand rises, which increases interest rates. ANSWER A
Date: September 10th, 2020
The author of The Wealth of Nations; The author of the General Theory a. David Ricardo; John Maynard Keynes. b. Adam Smith; A. C. Pigou. c. Adam Smith; David Ricardo d. Adam Smith; John Maynard Keynes. e. Adam Smith; John Stuart Mills. ANSWER D
Date: September 10th, 2020
The Phillips curve shifts because A) fiscal policy changes over time. B) of total factor productivity shocks. C) of economic development. D) none of the above. ANSWER D
Date: September 10th, 2020
Along any IS curve a. both government spending and expectations are fixed. b. government spending and the price level may vary. c. consumption and the price level are fixed. d. both government spending and tax rates may vary. e. all of the above ANSWER A
Date: September 10th, 2020
According to the short-run aggregate supply curve, if output minus potential output equals zero, then ________. A) unemployment might be zero B) inflation might be stable C) expected inflation must be stable D) price shocks must be zero E) none of the above ANSWER B
Date: September 10th, 2020
The substitution effect measures A) the responses of quantities to changes in the relative prices of goods. B) the responses of relative prices to changes in the demand for goods. C) how two goods can be used for the same purpose. D) the responses of quantities to changes in the relative qualities of goods. […]
Date: September 10th, 2020
Aggregate supply in the new classical aggregate supply a. is vertical in the short-run. b. is horizontal in the short-run. c. is upward sloping in the short-run. d. None of the above ANSWER C
Date: September 10th, 2020
When drawn against the current wage, the current labor supply shifts to the right if A) current taxes increase. B) future taxes decrease. C) firms make more profits. D) total factor productivity increases. ANSWER A
Date: September 10th, 2020
Assume that the economy is presently in equilibrium. A decline in the interest rate a. increases planned investment, aggregate demand, and equilibrium income. b. increases unplanned investment, reducing aggregate demand and equilibrium income. c. increases unplanned investment, increasing aggregate demand and equilibrium income. d. increases money demand, the money supply, aggregate demand, and equilibrium income. […]
Date: September 10th, 2020
