-Refer to the above diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD1 to AD2:

A) real output will rise above Qf. B) the price level will rise from P1 to P2. C) it is possible that aggregate supply will shift rightward from AS2 because nominal wage demands will rise. D) the price level will rise from P2 to P3. A) real output will rise above Qf. B) the price level will rise from P1 to P2. C) it is possible that aggregate supply will shift rightward from AS2 because nominal wage demands will rise. D) the price level will rise from P2 to P3. D

-Refer to the above graph. Given that the economy is at an initial equilibrium where the AD1 and AS1 curves intersect, demand-pull inflation in the short run can best be represented by a shift from:

A) AS1 to AS3. B) AD1 to AD2. C) AS1 to AS2. D) AD2 to AD1. A) AS1 to AS3. B) AD1 to AD2. C) AS1 to AS2. D) AD2 to AD1.

-Refer to the above diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. Cost-push inflation in the short run is best represented as a:

A) leftward shift of the aggregate supply curve from AS1 to AS2. B) rightward shift of the aggregate demand curve from AD1 to AD2. C) move from d to b to a. D) move from d directly to a. A) leftward shift of the aggregate supply curve from AS1 to AS2. B) rightward shift of the aggregate demand curve from AD1 to AD2. C) move from d to b to a. D) move from d directly to a.

Exam 15: Long-Run Macroeconomic Adjustments

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD₁ to AD₂:

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

An adverse aggregate supply shock:

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

-Refer to the above diagram for a specific economy. Which of the following best describes the relationship shown by this curve?

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

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

(Multiple Choice)

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Question 4

Many economists doubt the proposition that supply-side tax cuts increase aggregate:

(Multiple Choice)

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Question 5

One policy dilemma posed by cost-push inflation is that:

(Multiple Choice)

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Question 6

A basic criticism of supply-side economics is that:

(Multiple Choice)

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Question 7

-Refer to the above graph. Given that the economy is at an initial equilibrium where the AD₁ and AS₁ curves intersect, demand-pull inflation in the short run can best be represented by a shift from:

(Multiple Choice)

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Question 8

The Laffer Curve suggests that lower tax rates will decrease saving and increase consumption.

(True/False)

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Question 9

The short-run aggregate supply curve is vertical and the long-run aggregate supply curve is horizontal.

(True/False)

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Question 10

Demand-pull inflation in the short run increases the price level and:

(Multiple Choice)

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Question 11

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

(Multiple Choice)

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Question 12

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

(True/False)

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Question 13

The long-run aggregate supply curve:

(Multiple Choice)

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Question 14

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:

(Multiple Choice)

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Question 15

The long-run Phillips Curve is essentially a horizontal line at the economy's natural rate of unemployment.

(True/False)

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Question 16

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. Cost-push inflation in the short run is best represented as a:

(Multiple Choice)

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Question 17

A major adverse aggregate supply shock:

(Multiple Choice)

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Question 18

What will occur in the short run if there is cost-push inflation and if the government adopts a hands-off approach to it?

(Multiple Choice)

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Question 19

More inflation is likely to result when the government enacts policies to maintain full employment when there is cost-push inflation.

(True/False)

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Question 20

Showing 1 - 20 of 122

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD₁ to AD₂:

An adverse aggregate supply shock:

-Refer to the above diagram for a specific economy. Which of the following best describes the relationship shown by this curve?

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

Many economists doubt the proposition that supply-side tax cuts increase aggregate:

One policy dilemma posed by cost-push inflation is that:

A basic criticism of supply-side economics is that:

-Refer to the above graph. Given that the economy is at an initial equilibrium where the AD₁ and AS₁ curves intersect, demand-pull inflation in the short run can best be represented by a shift from:

The Laffer Curve suggests that lower tax rates will decrease saving and increase consumption.

The short-run aggregate supply curve is vertical and the long-run aggregate supply curve is horizontal.

Demand-pull inflation in the short run increases the price level and:

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

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

The long-run aggregate supply curve:

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:

The long-run Phillips Curve is essentially a horizontal line at the economy's natural rate of unemployment.

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. Cost-push inflation in the short run is best represented as a:

A major adverse aggregate supply shock:

What will occur in the short run if there is cost-push inflation and if the government adopts a hands-off approach to it?

More inflation is likely to result when the government enacts policies to maintain full employment when there is cost-push inflation.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Financial Economics

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 15: Long-Run Macroeconomic Adjustments

-Refer to the above diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD1 to AD2:

An adverse aggregate supply shock:

-Refer to the above diagram for a specific economy. Which of the following best describes the relationship shown by this curve?

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

Many economists doubt the proposition that supply-side tax cuts increase aggregate:

One policy dilemma posed by cost-push inflation is that:

A basic criticism of supply-side economics is that:

-Refer to the above graph. Given that the economy is at an initial equilibrium where the AD1 and AS1 curves intersect, demand-pull inflation in the short run can best be represented by a shift from:

The Laffer Curve suggests that lower tax rates will decrease saving and increase consumption.

The short-run aggregate supply curve is vertical and the long-run aggregate supply curve is horizontal.

Demand-pull inflation in the short run increases the price level and:

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

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

The long-run aggregate supply curve:

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:

The long-run Phillips Curve is essentially a horizontal line at the economy's natural rate of unemployment.

-Refer to the above diagram. The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1. Cost-push inflation in the short run is best represented as a:

A major adverse aggregate supply shock:

What will occur in the short run if there is cost-push inflation and if the government adopts a hands-off approach to it?

More inflation is likely to result when the government enacts policies to maintain full employment when there is cost-push inflation.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Financial Economics

International Trade

Exchange Rates and the Balance of Payments

Filters

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD₁ to AD₂:

-Refer to the above graph. Given that the economy is at an initial equilibrium where the AD₁ and AS₁ curves intersect, demand-pull inflation in the short run can best be represented by a shift from:

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

-Refer to the above diagram. The initial aggregate demand curve is AD₁ and the initial aggregate supply curve is AS₁. Cost-push inflation in the short run is best represented as a: