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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.
- Fall '08