Multiple Choice
Suppose the government increases aggregate demand to a level that increases GDP above its long-run equilibrium level. What sequence of events would follow?
A) prices rise; GDP increases; workers demand higher wages; short-run aggregate supply shifts to the left; GDP drops
B) prices fall; workers receive lower wages; short-run aggregate supply shifts to the right; GDP rises
C) prices rise; GDP increases; workers demand higher wages; long-run aggregate supply shifts to the left; GDP falls
D) prices fall; workers receive lower wages; aggregate supply shifts to the right; GDP rises
Correct Answer:
Verified
Correct Answer:
Verified
Q290: (Figure: Laffer Curve 2) The figure shows
Q291: If a government collects $1,400 in tax
Q292: How can public investment mitigate the crowding-out
Q293: What is the main reason that economists
Q294: Suppose a country has full employment and
Q296: Suppose the economy is growing at 4%
Q297: The largest source of federal government revenues
Q298: What type of government spending would be
Q299: Supply-side fiscal policies include all of these
Q300: If an expansionary policy pushes output beyond