Sample Qs on ASAD.pdf - Econ 144 Dr Staihr Spring 2018...

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Econ 144 Dr. Staihr Spring 2018 Sample Questions on ASAD 1. In the AD/SRAS/LRAS framework assume we are currently sitting at 4% unemployment. Which of the following is correct? a. If the Federal Reserve reduces the money supply this will shift SRAS to the left, which is closer to LRAS b. If the Federal Reserve reduces the money supply this will shift SRAS to the right, which is closer to LRAS c. If the Federal Reserve reduces the money supply this will shift AD to the right, which is closer to LRAS d. If the Federal Reserve reduces the money supply this will shift AD to the left, which is closer to LRAS 2. You are looking at the AD/SRAS/LRAS model. You open up the newspaper and read that consumer confidence has increased significantly and consumer s’ expectations about the future are generally positive. After any/all curves have shifted which will we see? a. A higher output level b. A higher price level c. A lower price level d. Both a) and b) but not c) 3. In 2001 Alan Greenspan (then Chairman of the Federal Reserve) lowered interest rates significantly.
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