An increase in the general level of prices in the goods and services market that is accompanied by a short-run reduction in real GDP is most likely caused by
a. an unanticipated decrease in aggregate demand.
b. an unanticipated increase in aggregate demand.
c. a favorable supply shock that shifts SRAS to the right.
d. an unfavorable supply shock that shifts SRAS to the left.
D
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The assumption(s) made to construct a kinked-demand oligopoly model is (are) that:
a. all firms in the industry will ignore the price changes made by any one firm. b. any price decrease will be ignored, but price increases will be followed. c. all firms will follow a price decrease but will ignore any price increase. d. all price changes made by any firm will be followed by all of the other firms. e. price can go up, but it cannot go down.
What is the Phillips curve? What is the difference between the original Phillips curve and the "modern" view of the Phillips curve? What problems caused the abandonment of the ideas behind the original Phillips curve?
What are some of the sources of long-run economic growth, and which is the greatest contributor to growth?
What will be an ideal response?
Expansionary fiscal policy can involve:
(a) Increasing consumption and investment and taxes. (b) Increasing government spending and decreasing taxes. (c) Increasing government spending and increasing taxes. (d) None of the above.