The supply of real GDP is a function of
What will be an ideal response?
the quantities of labor, capital and the state of technology.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
If labor market institutions change so that it becomes easier to find a job, and unemployed people are unemployed for smaller durations of time, what would happen to the natural rate of unemployment?
A. It would increase. B. It would remain the same, since the number of workers has not changed. C. It would decrease. D. There is not enough information to determine what would happen.
The long-run Phillips curve would shift left if
a. the money supply increased or if the minimum wage was reduced. b. the money supply increased but not if the minimum wage was reduced. c. the minimum wage was reduced but not if the money supply increased. d. None of the above is correct.
According to supply-side theory, which of the following would shift the aggregate supply curve leftward?
A. Lower marginal tax rates. B. An increase in the money supply. C. Government deregulation. D. An increase in unemployment and welfare benefits.