The country of Glassen has experienced an expansionary gap for the last three years. The advocates of passive policy are likely to suggest a policy which causes _____.
a. the short-run aggregate supply to shift to the left
b. the short-run aggregate supply to shift to the right.
c. rising prices to shift the aggregate demand to the left.
d. wages to fall relatively quickly.
e. aggregate demand to shift to the right as wages increase.
a
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Among possible union strategies, the one that can both raise wages and add to employment is
a. restricting the supply of workers. b. raising the demand curve for the product or for labor. c. fixing the wage. d. striking frequently.
Aggregate supply can be thought of as
a. a fixed amount of output. b. unrelated to the price level. c. a schedule of output at different price levels. d. the volume of goods at the ends of the production possibilities curve.
If the stock of capital of a nation is ________ while the population ________, the nation can produce more output, but output per worker falls.
A. fixed; decreases B. declining; decreases C. fixed; increases D. fixed; remains stable
Based on the Laffer Curve, a cut in the tax rate from 100 percent to a rate lower than the maximum-revenue rate will:
A. Decrease real GDP B. Increase tax revenues C. Decrease tax revenues D. Have no effect on tax revenues