quiz 10ma - 4. When GDP is above full-employment level,...

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Quiz for Chapter 10 (27). 1. The aggregate supply curve shows the relationship between the price level and the quantity of real GDP supplied, assuming: a. that all output prices and costs adjust simultaneously b. that costs increase faster than output prices c. that costs increase, but slower than output prices d. that costs are constant when output prices increase 2. What causes an outward shift in the aggregate supply curve? a. An increase in the price of imported oil b. An increase in wage expenses c. An increase in the country’s capital stock d. An increase in government spending 3. When there is a short-run equilibrium at less than full employment, it is likely that: a. Money wages will fall quickly b. Prices and wages will rise quickly c. A tax cut would speed the adjustment process d. A tax increase would speed the adjustment process
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Unformatted text preview: 4. When GDP is above full-employment level, what will likely happen? a. Stagflation will occur b. The price level will fall c. Wages will remain constant d. Aggregate supply will shift outwards 5. When GDP is above the full-employment level, adjustment back to the full-employment level is likely to: a. Be accompanied by falling prices b. Be accompanied by rising employment c. By relatively fast, compare to the time that adjustment takes when GDP is below full employment d. Be relatively slow, compared to the time that adjustment takes when GDP is below full employment 6. Which event may lead to stagflation? a. A fall in the price of imported oil b. N increase in the price of imported oil c. A reduction in taxes d. An increase in taxes...
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This note was uploaded on 09/09/2008 for the course ECON 202 taught by Professor Fernandez during the Fall '08 term at University of Louisville.

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