Which of the following would produce a rightward shift in the short-run aggregate supply curve?
a. An increase in consumption spending.
b. A decrease in investment
c. A decrease in government spending.
d. A decrease in net exports.
e. None of the above.
e
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If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a
A) rightward shift of the AS curve and a movement along the AD curve. B) movement downward along the AS curve as a result of a leftward shift of the AD curve. C) movement upward along the AS curve as a result of a rightward shift of the AD curve. D) leftward shift of the AS curve and a movement along the AD curve. E) rightward shift of potential GDP.
The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should
A) buy government securities and thereby increase aggregate supply. B) sell government securities and thereby decrease aggregate demand. C) buy government securities and thereby decrease aggregate demand. D) buy government securities and thereby increase aggregate demand. E) sell government securities and thereby increase aggregate demand.
The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because:
a. it costs too much. b. the value to the neighborhood exceeds the cost of repair. c. others who use the street will be free riders. d. they do not trust the government. e. there are negative externalities associated with the repair.
A statement of fact that can be verified by observation is
a. an abstraction b. a positive statement c. a normative statement d. a philosophical conundrum e. the basis of an assumption