Why do increases in potential output allow monetary policymakers to think "opportunistically" about disinflation?
What will be an ideal response?
Increases in potential output put downward pressure on inflation rates. As a result, monetary policymakers have the opportunity to lower the target rate of inflation at every real interest rate without creating a recession.
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In the Modern Keynesian Model the short run aggregate supply curve slopes upward. How could one explain the shape of the upward sloping? short-run aggregate supply curve by only focusing on the capital? input?
The unemployment rate equals
A) (number of people without a job ÷ population)× 100. B) (number of people without a job ÷ working-age population) × 100. C) [(working-age population - number of people employed) ÷ labor force] × 100. D) (number of people unemployed ÷ labor force) × 100. E) (number of people unemployed ÷ population) × 100.
Which of the following will reduce the supply of motorcycles?
A. An increase in the population age 16 to 35, the primary consumers of motorcycles. B. An increase in taxes imposed on motorcycle producers. C. A technological improvement reducing the production costs of motorcycles. D. A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles.
? Along the short-run aggregate supply curve (SRAS), an increase (rightward shift) in the aggregate demand curve will increase:
A. ?both the price level and real GDP. B. real GDP without raising the price level. C. the price level without affecting real GDP. D. ?the price level but reduce real GDP.