An increase in aggregate supply will cause the price level to:
a. rise and GDP to rise
b. rise and GDP to fall.
c. rise and the unemployment rate to fall.
d. fall and GDP to rise.
e. fall and the unemployment rate to rise.
d
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Can macroeconomic policy be used systematically to create unanticipated inflation?
A) No, according to Keynesian economists. B) Yes, according to classical economists. C) No, according to classical economists. D) Yes, according to Keynesian economists, if Ricardian equivalence holds.
During the Great Depression, as real interest rates rose, good credit risks were less likely to seek loans. This process illustrates the phenomenon of ________
A) adverse selection B) moral hazard C) poor monetary policy D) debt deflation
Monopolistically competitive firms have monopoly power because they
A) face downward sloping demand curves. B) are great in number. C) have freedom of entry. D) are free to advertise.
Between 1998 and 2001, the federal budget was:
a. never in surplus. b. in surplus about as often as it was in deficit. c. in surplus. d. never in deficit.