Exam 38: Extending the Analysis of Aggregate Supply

The Romer and Romer 2010 paper in the American Economic Review found that tax changes that are made to promote long-run growth or to reduce an inherited budget deficit tend to result in

Demand-pull inflation and cost-push inflation are identical concepts because both involve lower unemployment rates and rising prices.

The short-run aggregate supply curve illustrates the idea that if the price level falls, firms will experience

In the absence of unexpected shocks, the economy will tend to experience

Which is a basic proposition of supply-side economics?

In the long run,

The short-run Phillips Curve assumes an unchanging

The long-run aggregate supply curve stays in a fixed position over time.

Since the Great Recession of 2007-2009

If the government adopts a hands-off approach to cost-push inflation in the economy, then in the short run there is likely to be

In the long run, the economy will always move toward full employment.

In the long run, demand-pull inflation leads to

The short run in macroeconomics is a period in which nominal wages remain fixed even as the general price level changes.

Other things equal, the short-run aggregate supply curve shifts positions when

Supply-side economists contend that aggregate supply is the relevant policy factor in influencing the price level and real output in an economy.

Which of the following is a tenet of supply-side economics?

Assume that a person earns $600 per day at a certain job.If the marginal tax rate is cut from 40 percent to 30 percent, then this person's after-tax daily earnings will

An adverse aggregate supply shock

The Phillips Curve suggests an inverse relationship between increases in the price level and the level of employment.

One central idea in supply-side economics concerning budget deficits is illustrated by the