Question : 21) Refer to Figure 14.7. Which combinations of events could : 1381207

 

21) Refer to Figure 14.7. Which combinations of events could move the economy from Point A to Point B, and then from Point B to Point E?

A) a contractionary monetary policy followed by a leftward shift in the AS curve

B) a contractionary monetary policy followed by a rightward shift in the AS curve

C) an expansionary fiscal policy followed by a leftward shift in the AS curve

D) an expansionary fiscal policy followed by a rightward shift in the AS curve

22) Refer to Figure 14.7. Suppose the economy is at Point A, a sudden increase in the price of oil without any change in the aggregate demand shifts the short-run Phillips curve (SRPC) from

A) SRPC1 to SRPC2.

B) SRPC1 to SRPC3.

C) SRPC2 to SRPC1.

D) SRPC3 to SRPC1.

 

23) Refer to Figure 14.7. If the economy is at Point B, the cost of raw material decreased dramatically, and the aggregate demand did not change, the economy could move to Point

A) A.

B) E.

C) C.

D) D.

 

24) Refer to Figure 14.7. Suppose the economy is at Point A, and the cost of inputs is fixed. An increase in government spending could move the economy to Point

A) E.

B) B.

C) C.

D) D.

 

25) If aggregate demand increases and expectations regarding inflation remain constant,

A) the economy moves along the short-run Phillips curve.

B) the short-run Phillips curve shifts to the right.

C) the short-run Phillips curve shifts to the left.

D) the long-run Phillips curve shifts to the right.

26) If inflation expectations change as a result of an expansionary fiscal policy, this causes

A) the long-run Phillips curve to shift.

B) the short-run Phillips curve to shift.

C) the short-run Phillips curve to remain constant.

D) a movement along the short-run Phillips curve.

 

27) If aggregate supply increases and aggregate demand remains unchanged,

A) there will be a positive relationship between the price level and the level of aggregate output.

B) there will be a negative relationship between the price level and the level of aggregate output.

C) there will be no systematic relationship between the price level and the level of aggregate output.

D) the price level will remain unchanged, but aggregate output will decrease.

 

28) The economy experiences both inflation and unemployment when

A) aggregate demand decreases and aggregate supply increases.

B) aggregate supply decreases and aggregate demand remains unchanged.

C) aggregate demand decreases and aggregate supply remains unchanged.

D) aggregate demand increases and aggregate supply decreases.

 

29) The economy experiences both a falling price level and falling unemployment when

A) aggregate supply increases with aggregate demand stable.

B) aggregate demand increases with aggregate supply stable.

C) aggregate supply decreases with aggregate demand stable.

D) aggregate demand decrease with aggregate supply stable.

30) There is no systematic relationship between the price level and the level of aggregate output when

A) aggregate demand is negatively sloped.

B) aggregate demand is changing, but aggregate supply is not.

C) both aggregate supply and aggregate demand are changing simultaneously.

D) aggregate supply is changing, but aggregate demand is not.

 

 

 

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