Question 1

Starting from long-run equilibrium, a sharp drop in oil prices results in ____ output in the short run and _____ output in the long run.

Accepted Answer

A)  higher; higher 
B)  higher; potential 
C)  lower; potential 
D)  lower; higher 
A)  higher; higher 
B)  higher; potential 
C)  lower; potential 
D)  lower; higher

Question 2

According to the Aggregate Demand Aggregate Supply diagram, short-term, an anti-inflation policy creates:

Accepted Answer

A)  higher output. 
B)  higher inflation. 
C)  lower inflation. 
D)  higher unemployment 
A)  higher output. 
B)  higher inflation. 
C)  lower inflation. 
D)  higher unemployment

Question 3

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ___ and eventually to a long-run equilibrium at point ____, if left to self-correcting tendencies.

Accepted Answer

A)  D; B 
B)  D; C 
C)  B; A 
D)  B; C 
A)  D; B 
B)  D; C 
C)  B; A 
D)  B; C

Starting from long-run equilibrium, a sharp drop in oil prices results in output in the short run and _ output in the long run.

According to the Aggregate Demand Aggregate Supply diagram, short-term, an anti-inflation policy creates:

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point _ and eventually to a long-run equilibrium at point __, if left to self-correcting tendencies.

Thinking Like an Economist

Supply and Demand

International Trade and Trade Policy

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: GDP, Unemployment, and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money, The Federal Reserve, and Global Financial Markets

Short-Term Economic Fluctuations and Fiscal Policy

Stabilizing the Economy: The Role of the Fed

Exchange Rates and the Open Economy

Filters

Exam 12: Inflation and Aggregate Supply

Starting from long-run equilibrium, a sharp drop in oil prices results in ____ output in the short run and _____ output in the long run.

According to the Aggregate Demand Aggregate Supply diagram, short-term, an anti-inflation policy creates:

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ___ and eventually to a long-run equilibrium at point ____, if left to self-correcting tendencies.

Thinking Like an Economist

Supply and Demand

International Trade and Trade Policy

Macroeconomics: the Birds-Eye View of the Economy

Measuring Economic Activity: GDP, Unemployment, and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money, The Federal Reserve, and Global Financial Markets

Short-Term Economic Fluctuations and Fiscal Policy

Stabilizing the Economy: The Role of the Fed

Exchange Rates and the Open Economy

Filters

Starting from long-run equilibrium, a sharp drop in oil prices results in output in the short run and _ output in the long run.

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point _ and eventually to a long-run equilibrium at point __, if left to self-correcting tendencies.