According to supply-side economics, a(n) ________ in the tax rate tends to increase the labor supply and ________ aggregate output.
A. decrease; increase
B. increase; decrease
C. decrease; decrease
D. increase; increase
Answer: A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
Neo-Keynesians believe that the government will never have to choose between policies to control unemployment and policies to control inflation
Indicate whether the statement is true or false
As of 2005 the European Union had:
a. 5 members. b. 15 members. c. 25 members. d. 40 members.
Which of the following observations concerning the Phillips curve is not true?
A. They are normally upward-sloping. B. They are more commonly constructed for price inflation. C. They depict the inverse relation between wage inflation and unemployment. D. They depict the rate of unemployment on the horizontal axis.