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The longer is the interval between firms' price adjustments
A) the smaller the output effect of a given change in the money supply. B) the longer the interval that the horizontal new Keynesian aggregate supply curve will remain in position. C) the new Keynesian aggregate supply curve will become steeper. D) the shorter the interval the horizontal new Keynesian aggregate supply curve will remain in position.
In a negative income tax program,
a. the government guarantees a minimum level of family income b. a family must pay income taxes on its welfare check c. a family receives a fixed amount of money from the government and its members can keep all income earned through work d. the government reduces the welfare payment by any income earned through work e. a family's income is lower if its members work
Some economists argue that since inflation
a. raises the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. b. raises the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust. c. reduces the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. d. reduces the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust.
(Advanced analysis) Assume that the MPS is .33 in an economy that has an aggregate supply curve with a slope of 1. An increase in investment spending of $10 billion will shift the aggregate demand curve rightward by:
A. $30 billion and increase real GDP by $15 billion. B. $30 billion and increase real GDP by $30 billion. C. $10 billion and increase real GDP by $30 billion. D. $10 billion and increase real GDP by $10 billion.