Exam 38: Extending the Analysis of Aggregate Supply

In an aggregate demand-aggregate supply framework, fiscal policy that emphasizes cutting taxes as a means of improving incentives to work, save, and invest would be characterized primarily as a

Which of the following is a true statement?

Which of the following is a true statement?

Stagflation's demise during the 1980s resulted in a

The traditional Phillips Curve suggests that, if government uses an expansionary fiscal policy to stimulate output and employment,

A senator states, "We need to cut taxes in order to increase incentives to work and produce, so that we can pull the nation out of this economic slump." A mainstream economist who is a critic of this policy would likely reply that

The Laffer Curve is a central concept in

The misery index is a measure of national economic discomfort that adds together a nation's

According to the simple extended AD-AS model, demand-pull inflation and cost-push inflation have the same effect on output in the long run.

The short-run aggregate supply curve is upsloping because higher price levels

The adjustment mechanism that brings the economy to its long-run aggregate supply has to do with inflation expectations, whereas the adjustment to the long-run Phillips curve has to do with wage flexibility.

Supply-side economists contend that the system of taxation in the United States

In the short-run, demand-pull inflation increases

The Laffer Curve shows the trade-off between the price level and tax rates.

A rightward shift of the Phillips Curve suggests that a lower rate of unemployment is associated with each inflation rate.

Assume that initially your nominal wage was $16 an hour and the price index was 100.If the price level increases to 105, then your

To convey the point about supply-side economics, economist Arthur Laffer likened taxpayers to

In the long run, if the price level decreases, then the economy's output level will

Supply-side economist Arthur Laffer has argued that

Most economists think that