If wage rates rise at the same time that labor productivity increases, what is the effect on short-run aggregate supply (SRAS)?
A) SRAS rises.
B) SRAS falls.
C) SRAS remains constant.
D) SRAS may rise, fall, or remain constant.
D
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What will be an ideal response?
For each of the following changes, which equilibrium curve (IS, LM, or FE) is shifted? Draw the change in the underlying demand or supply curves (for example, money demand and supply for the LM curve) and show how the equilibrium curve changes
(a) Expected inflation increases. (b) The future marginal productivity of capital increases. (c) Labor supply decreases. (d) Future income declines. (e) There's a temporary beneficial supply shock. (f) The nominal interest rate on money rises.
Suppose the Federal Reserve wanted to reduce the money supply without using open-market operations
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The main goal of antitrust policy is to
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