How does the aggregate demand and aggregate supply model return to long-run equilibrium after an increase in spending growth?
A. The SRAS curve shifts up and to the left as inflation expectations adjust.
B. The AD curve shifts back to the left as inflation expectations adjust.
C. The AD curve shifts out to the right as inflation expectations adjust.
D. The SRAS curve shifts down and to the left as inflation expectations adjust.
Ans: A. The SRAS curve shifts up and to the left as inflation expectations adjust.
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A decrease in the money supply would cause the IS curve to ________ and the LM curve to ________
A) shift down and to the left; be unchanged B) shift down and to the left; shift up and to the left C) be unchanged; shift up and to the left D) be unchanged; shift down and to the right
Refer to the information above. What is the equilibrium level of GDP?
A) 300 B) 400 C) 450 D) 525
If the economy was about to enter an inflationary boom, which of the following would be the most appropriate policy?
a. A tax increase. b. A decrease in government spending. c. An increase in government spending. d. A tax decrease.
A society is productive inefficient when
What will be an ideal response?