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Assignment-6 - ECN 204 Introductory Macroeconomics...

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Page 1 of 10 pages ECN 204 Introductory Macroeconomics Instructor: Sharif F. Khan Department of Economics Ryerson University Fall 2005 Assignment 6 Part A Multiple-Choice Questions [30 marks] Each question is worth 1.5 marks. There is no negative marking for wrong answers To answer each question correctly, you have to choose the best answer from the given four choices. 1. Demand-pull inflation in the short-run increases the price level and: A) real wages. B) real output. C) unemployment. D) nominal wages. 2. The economy enters the long-run once: A) nominal wages become real wages. B) real wages become nominal wages. C) sufficient time has elapsed for wage contracts to expire and nominal wage adjustments to occur. D) sufficient time has elapsed for real GDP to increase and unemployment to decrease. 3. In the long run, demand-pull inflation: 4. In long run aggregate demand-aggregate supply model:
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Page 2 of 10 pages Use the following to answer question 5: 5. Refer to the above diagram. The initial aggregate demand curve is AD 1 and the initial aggregate supply curve is AS 1 . In the long run, demand-pull inflation is best shown as:
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Page 3 of 10 pages Use the following to answer questions 6-7:
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