Exam 38: Extending the Analysis of Aggregate Supply

The long run aggregate supply curve is upward-sloping because real wages eventually change by the same amount as changes in the price level.

In the short run, if the price level increases, then nominal wages

One policy dilemma posed by cost-push inflation is that

Inflation accompanied by falling real output and employment is known as

(Last Word) According to the research of Christina Romer and David Romer,

Stagflation can be described as a

(Last Word) According to the research of Christina Romer and David Romer, tax increases implemented to reduce an inherited budget deficit

Adverse aggregate-supply shocks or stagflation would cause a

In 1993 the federal government boosted income tax rates.The change in tax revenue that occurred in the seven years that followed

If the government uses expansionary monetary or fiscal policies to counter the output effects of cost-push inflation, then the economy is likely to experience

The level of potential output and location of the long-run aggregate supply curve are determined by

A rightward shift of the traditional Phillips Curve would suggest that

If wages and other input prices are inflexible, then the economy will not automatically adjust to full employment in the long run.

With demand-pull inflation in the extended AD-AS model, there is

The idea that reductions in tax rates will increase tax revenue is illustrated by the

Which of the following is a true statement?

Demand-pull inflation in the short run raises the price level and

Which event probably contributed to the stagflation of the 1970s?

In the short run, if the actual rate of inflation falls lower than the expected rate, then

A rightward shift of the Phillips Curve suggests that