Changes in the expected rate of inflation will:
A. cause the SRAS curve to become vertical.
B. not shift but create a movement along the SRAS curve.
C. shift the SRAS curve downward or upward.
D. cause the SRAS curve to become upward-sloping.
Answer: C
You might also like to view...
Lin is maximizing total utility while consuming food and clothing. Her marginal utilities of food and clothing are 50 utils and 25 utils, respectively. If clothing is priced at $10 per unit, the price of a unit of food
a. must be rising b. must be falling c. must equal $10 as well d. must equal $20 e. cannot be determined without additional information.
Use of real GDP to measure changes in national output from one period to another can be misleading if
What will be an ideal response?
In Keynes's view, an excess quantity of money supplied causes people to:
A. sell bonds and the interest rate rises. B. buy bonds and the interest rate falls. C. buy bonds and the interest rate rises. D. increase speculative balances.
In the short-run, if the Federal Reserve decreases interest rates, then consumption and investment ________, planned aggregate expenditure ________, and short-run equilibrium output ________.
A. increase; decreases; decreases B. increase; increases; decreases C. decrease; decreases; decreases D. increase; increases; increases