Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ? A. People will…
Which of the following events shifts the short run aggregate supply curve to the right ? A. a decrease in the money supplyB. a drop-in oil prices C. an increase in government spending on military equipment D. None of these…
Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to…
Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the…
Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration…
The natural rate of output is the amount of real GDP produced ? A. When the economy is at the natural rate of unemployment B. When the economy is at the natural rate of investment C. When the economy is…
Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply cruve ? A. Is vertical because an equal change in all prices and wages leaves output unaffected B. is positively sloped because price…
In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to ? A. shift the short-run aggregate supply curve to the leftB. shift the aggregate demand curve to the right C.…
Which of the following would not cause a shift in the long-run aggregate supply curve ? A. All of these answers shift the long-run aggregate supply curve B. An increase in the available capital C. An increase in the available…
Which of the following statements about economic fluctuations is true ? A. None of these answers B. A depression is a mild recessionC. A variety of spending income, and output measures can be used to measure economic fluctuation because most…