Exam 18: Extending the Analysis of Aggregate Supply

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

Refer to the diagram. The move of the economy from c to e on short-run Phillips Curve PC2 would be explained by an

In the short run, output increases in response to a rising price level, but not in the long run.

Suppose that the Consumer Price Index for a particular economy rose from 110 to 120 in year 1, 120 to 130 in year 2, and 130 to 140 in year 3. We could conclude that this economy is experiencing

What is disinflation?

A rightward and upward shift of the Phillips Curve is consistent with the occurrence of stagflation.

Which of the following statements is true?

What are three significant generalizations supported by results from the extended AD-AS model?

Inflation in the short run is most likely to result from a(n)

Inflation accompanied by falling real output and employment is known as

Refer to the graphs. An increase in the economy's human capital would shift curve

A potential cause of stagflation is

The long-run Phillips Curve is vertical at

Refer to the diagram for a specific economy. The shape of this curve suggests that

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

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

In the short run, nominal wages and other input prices are assumed to be

Refer to the diagram. Assume that the natural rate of unemployment is 5 percent and that the economy is initially operating at point c, where the expected and actual rates of inflation are each 4 Percent. If the actual rate of inflation unexpectedly rises from 4 percent to 6 percent, the economy Will

(Last Word) List the four motivating factors behind significant tax changes as found by Romer and Romer.