Exam 38: Extending the Analysis of Aggregate Supply

From the perspective of supply-side economists, a cut in tax rates will

An adverse aggregate supply shock could result from

The short-run aggregate supply curve shifts to the left when nominal wages rise in response to price level increases.

Which presidential administration is most closely associated with the economic policies of supply-side economics?

Disinflation can be explained by the Phillips Curve analysis as resulting from a situation where the actual rate of inflation is initially less than the expected rate, causing the unemployment rate to

In the long run, demand-pull inflation

One criticism against supply-side cuts in marginal tax rates is that they fail to

If graphed, the relationship shown would depict this economy's

The long-run Phillips Curve is vertical at

A Congressional representative who calls for a decrease in tax rates in order to increase saving, work effort, and economic growth would most likely be advocating

The traditional Phillips Curve suggests a trade-off between

The long-run aggregate supply curve is vertical

One implication of the Laffer Curve in supply-side arguments is that cutting taxes may actually reduce the budget deficit, contrary to what traditional economics teaches.

Demand-pull inflation and cost-push inflation have similar effects on real output in the short run.

In the extended aggregate demand-aggregate supply model,

In the extended aggregate demand-aggregate supply model,

If the economy is operating in the intermediate range of the aggregate supply curve, then the greater the rate of growth of aggregate demand, the

The inflation and unemployment data for the 1970s suggest that the aggregate-supply shocks of that period caused the

In the context of the Phillips curve, stagflation can only be understood as a rightward shift of the curve.

If government uses fiscal policy to restrain cost-push inflation, we can expect