When 6) wage rates rise faster than the increase in labour productivity the
6)
y
A) Y* curve shifts right.
B) AS curve shifts downward.
C) AS curve shifts upward.
D) the AD curve'shifts left.
E) Y* schedule shifts left.
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7) The output gap is defined as the
7)
A) level of total output that would be produced if capacity utilization is at the normal rate.
B) result of economic growth.
C) difference between nominal GDP and real GDP.
D) difference between actual GDP and potential GDP.
E) constant factor in the long-run.
8) A leftward shift of longrun aggregate supply curve (potential GDP) could be caused by
8)
A) an increase current in national savings.
B) a decrease in interest rates.
C) an improvement in the productivity of labour.
D) a fall in the price level.
E) a decrease in the available resources.
9) Fiscal policy refers to the
A) government's use of policy tools to influence the net export function, thereby influencing GDP.
B) household's attempts to change savings to encourage growth.
C) government's use of spending and taxing policies to influence aggregate demand and
aggregate supply.
D) business sector's influence on investment and GDP.
E) government's attempts to maintain a vertical long run aggregate supply curve.
9)
r