A rightward shift in the dynamic aggregate demand curve could result from:
A. an increase in investment resulting from a lower inflation rate.
B. a rightward shift of the monetary policy reaction curve.
C. a decrease in government purchases.
D. a leftward shift of the monetary policy reaction curve.
Answer: B
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The aggregate production function
A) measures the productivity of labor as leisure decreases. B) increases only with increases in productivity. C) shows that real GDP can increase because of increased productivity as well as increased labor hours. D) cannot show the impacts of productivity improvements.
An indifference curve is a line that shows combinations of goods among which a consumer
A) needs equally. B) does not care which combination he or she receives. C) can afford. D) has readily available.
In the self-correcting AD/AS model, the economy's short-run equilibrium position is indicated by the intersection of which two curves?
a. Long-run aggregate supply and aggregate demand. b. Long-run aggregate demand and short-run personal consumption expenditures curve. c. Short-run aggregate supply and aggregate demand. d. Short-run aggregate supply and long-run aggregate supply.
The downward slope of the Phillips curve suggests that
A. policy makers face a trade-off between inflation and unemployment. B. a decrease in the money supply will stimulate aggregate demand. C. an increase in the price level will depress nominal wages. D. an increase in the price level will increase the money supply.