CH16 - CHAPTER 16 Extending the Analysis of Aggregate...

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CHAPTER 16 Extending the Analysis of Aggregate Supply Topic Question numbers ___________________________________________________________________________________________________ 1. Short-run and long-run aggregate supply 1-26 2. Extended AD-AS model 27-44 3. Phillips Curve 45-63 4. Long-run Phillips Curve 64-90 5. Taxation and aggregate supply 91-99 Last Word 100-102 True-False 103-116 ___________________________________________________________________________________________________ Multiple Choice Questions Short-run and long-run aggregate supply 1. In terms of aggregate supply, a period in which nominal wages and other input prices are constant is called the: A) long run. B) short run. C) immediate market period. D) very long run. 2. In terms of aggregate supply, a period in which nominal wages and other input prices are variable is called the: A) long run. B) short run. C) immediate market period. D) very long run. 3. In the extended analysis of aggregate supply, the short-run aggregate supply curve is: A) vertical and the long-run aggregate supply curve is horizontal. B) horizontal and the long-run aggregate supply curve is vertical. C) upward sloping and the long-run aggregate supply curve is vertical. D) horizontal and the long-run aggregate supply curve is upward sloping. 4. In the extended analysis of aggregate supply, the long-run aggregate supply curve is: A) vertical and the short-run aggregate supply curve is horizontal. B) horizontal and the short-run aggregate supply curve is vertical. Page 1
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C) horizontal and the short-run aggregate supply curve is upward sloping. D) vertical and the short-run aggregate supply curve is upward sloping. 5. In terms of aggregate supply, the short run is a period in which: A) the price level is constant. B) employment is constant. C) real output is constant. D) nominal wages and other input prices are constant. 6. In terms of aggregate supply, the difference between the long run and the short run is that in the long run: A) the price level is variable. B) employment is variable. C) real output is variable. D) nominal wages and other input prices are variable. 7. The long-run aggregate supply curve is vertical: A) because the rate of inflation is steady in the long run. B) because resource prices eventually catch up with product prices. C) because product prices always increase at a faster rate than resource prices. D) only when the money supply increases at the same rate as real GDP. 8. The short-run aggregate supply curve is upsloping because: A) of the interest rate effect. B) higher price levels create incentives to expand output when resource prices remain constant. C) of the net export effect. D) higher price levels create an expectation among producers of still higher price levels. 9.
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This note was uploaded on 06/24/2008 for the course ECO 201/202 taught by Professor N/a during the Spring '08 term at VCCS.

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CH16 - CHAPTER 16 Extending the Analysis of Aggregate...

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