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16 Apr 2018

According to the hybrid, or consensus, view of aggregate supply, the chance for an aggregate demand increase to cause inflation accelerates as

a) The economy moves toward capacity

b) the economy moves away from full employment

c)the slope of aggregate supply becomes flatter

d)unemployment increases

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Collen Von
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18 Apr 2018
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Related textbook solutions

Principles of Economics
2nd Edition, 2017
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ISBN: 9781947172364
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2 Edition,
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ISBN: 9781947172388
Principles of Microeconomics
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Related questions

1) Explain why the Aggregate Supply curve becomes increasingly steeply sloped at levels of RGDP near "full employment" and becomes especially steeply sloped beyond "full employment" RGDP (hint: this topic is not discussed in your text... you will need to understand this week's lecture notes to answer this).


2) Why might the rate at which the Aggregate Supply curve shifts vertically upward increase when an economy produces beyond full employment. (Hint: think about the effect of very low unemployment rates on the balance of bargaining power between employers and workers)


3) Explain why inflation rates are likely to rise when an economy expands beyond full employment capacity output. Draw an aggregate supply-aggregate demand diagram to illustrate your answer. (Hint: utilize your answers to #1 & #2 to answer this question)

MACROECONOMICS

1. Which one of the following is not a determinant of aggregate demand?

a. Investment expenditure

b. Technology

c. Consumption expenditure

d. Net exports

2. An improvement in technology will?

a. Decrease aggregate demand

b. Increase aggregate demand

c. Increase aggregate supply

d. Decrease aggregate supply

3. Oil price changes in the mid 80's are an example of?

a. An exiernal supply shock increasing prices and reducing real income

b. An external supply shock decreasing prices and raising real income

c. An external supply shock increasing prices and reducing real in come

d. An external demand shock inceasing prices and reducing real in come

4. The oil shock in 1979-80 was an example of?

a. An external supply shock decreasing prices and increasing real income

b. An external supply shock increasing prices and decreasing real income

c. An external demand shock decreasing prices and real income

d. An external demand shock increasing prices and real income

5. Which one of the following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Wealth effect

c. Changes in real output

d. Changes in interest rate

6.Which one of the following is not determinant of aggregate supply?

a. Productivity

b. Disposal income

c. Capacity and investment plan

d. Cost and availability of resources

7. Which of the following relationship is correct?

a. Equilibrium employment and full employment may not be the same

b. Equilibrium employment and full employment are not related

c. Equilibrium employment and full employment are always the same

d. Equilibrium employment and full employment are never the same

8. Which of the following was not a factor limiting the severity of effects of the oil sopply shock of 1979-80?

a. Increase in use of alternative sources of energy

b. More efficient use of energy

c. Increased supplies of non-OPEC oil

d. More rapid worldwide economic growth

9. Which one of following does not cause the aggregate demand curve to slop downward?

a. Changes in relative prices between foreign and domestic goods

b. Interest rate changes

c. Wealth effect

d. Chnages in real output

10. With aggregate demand shocks?

a. teh aggregte supply curve moves up the aggregate demand curve and increases price and reduces real income

b. the aggregate demand curves moves up the aggregate supply curve and increases prices and real income

c. the aggregate demand curves moves down the aggregate supply curve and increases both prices and real income

d. the aggregate supply curve moves down the aggregate demand curve and reduces prices and increases in real income

1.ย ย For a fiscal policy to be most effective, we must have

a. perfectly flexible wages and prices.

b. a vertical AS curve.

c. accurate information about the state of the economy.

d. a balanced government budget in each year.

e. a high marginal propensity to save.

2. Which of the following will make crowding out caused by government borrowing more severe?

a. A steep (inelastic) investment demand curve

b. A global credit market

c. Tax increases

d. A steep (inelastic) supply curve in the loanable funds market

e. None of the above

3. Government spending policies can be developed to work against the problems of unemployment and inflation because government spending can

a. decrease aggregate demand to combat unemployment and increase aggregate demand to combat inflation.

b. increase aggregate supply to combat unemployment and decrease aggregate demand to combat inflation.

c. increase aggregate supply to combat unemployment and decrease aggregate supply to combat inflation.

d. increase aggregate demand to combat unemployment and increase aggregate demand to combat inflation.

e. increase aggregate demand to combat unemployment and decrease aggregate demand to combat inflation.

ย 

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