Growth in aggregate demand will
A) cause the short-run Phillips curve to shift to the left.
B) increase unemployment.
C) move the economy to a higher point on the short-run Phillips curve.
D) cause deflation.
C
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If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, in the short run before the expected inflation rate changes, the SRPC ________ and the LRPC ________
A) shifts downward; shifts leftward B) shifts downward; does not change C) does not change; shifts rightward D) shifts upward; does not change E) does not change; does not change
Generally, the higher the level of output in an economy is the ________ will be
A) lower the unemployment rate and inflation rate B) higher the unemployment rate and inflation rate C) higher the unemployment rate and the lower inflation rate D) lower the unemployment rate and the higher inflation rate
What is one implication of the real-balance effect?
A) The part of your wealth that you hold in the form of cash loses some of its value as the price level rises. B) When the price level rises, people have an incentive to work harder in order to earn a higher income. C) When the price level falls, most consumers reallocate their spending so as to have an equal balance between necessities and luxuries. D) Aggregate demand and aggregate supply can never reach long-run equilibrium.
Why does the return to capital change after trade occurs?
a. There is more labor used per unit of capital in the manufacturing sector. b. There is more capital used per unit of labor in the manufacturing sector. c. There is more labor used per unit of land in the agricultural sector. d. There is more land used per unit of labor in the agricultural sector.