Exam 12: Aggregate Supply

Exhibit 11-9 -The movement shown in Exhibit 11-9 could be caused by

In the long run, but not in the short run,

Among the reasons firms find it profitable to expand output in the short run when the price level is rising faster than expected is that

The natural rate of unemployment includes frictional, cyclical, and structural unemployment.

If the economy were at its potential output level, which of the following would not be true?

When the economy is at its potential output level, which of the following is not true?

If the actual price level turns out to be lower than expected,

Given the aggregate demand curve, an adverse supply shock would

An increase in short-run aggregate supply could decrease nominal GDP.

As a contractionary gap is closed in the long run by firms' actions,

Increases in the costs of producing each level of output will cause a rightward shift of the short-run aggregate supply curve.

Which of the following is true of a contractionary gap?

Given implicit or explicit resource price agreements, if the actual price level is below the expected price level, the

An increase in short-run aggregate supply that increases the price level will increase the inflation rate as well.

At the potential level of output, there is no seasonal unemployment.

Potential output is the amount produced when

Which of the following changes best represents the effect on the U.S. of the oil embargo (a shut-off of oil from certain OPEC countries) of the 1970s?

If the economy were at its potential output level, which of the following would not be true?

If the expected price level exceeds the actual price level,

The oil price shock of the 1970's would be an example of a negative supply shock.