Pre-Test Chap 35 e18 - Pre-Test Chap 35 e18 Student: _ 1....

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Pre-Test Chap 35 e18 Student: ___________________________________________________________________________ 1. Which factor contributed to the demise of stagflation in the 1980s? A. Less foreign competition B. More government regulation C. A reduction in OPEC's oil prices D. A rise in per-unit production costs 2. Assuming prices and wages are flexible, a recession will decrease the price level, which: A. Raises nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level B. Raises nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level C. Reduces nominal wages, and which eventually decreases the short-run aggregate supply curve, thus decreasing real output to its original level D. Reduces nominal wages, and which eventually increases the short-run aggregate supply curve, thus increasing real output to its original level 3. Adverse aggregate supply shocks would result in: A. A lower rate of inflation and a higher rate of unemployment B. A higher rate of inflation and a lower rate of unemployment C. A lower rate of inflation and a lower rate of unemployment D. A higher rate of inflation and a higher rate of unemployment 4. Assume that a person saves $100,000 and earns 6 percent annual interest. If the marginal tax rate is 40 percent then the after-tax interest rate will be: A. 2.1 percent B. 2.9 percent C. 3.6 percent D. 4.7 percent 5. To convey the point about supply-side economics, economist Arthur Laffer likened taxpayers to: A. The ancient Greeks and the government to the ancient Romans B. Sea passengers on the Titanic and government to the icebergs C. Western pioneers in the United States and government to railroads D. Travelers through Sherwood Forest and the government to Robin Hood
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6. Refer to the above graph. Which combination would best explain a shift in real domestic output from Q 1 to Q 2 ? A. Increase in long-run aggregate supply (AS 1 to AS 2 ) and decrease in short-run aggregate supply (AS 2 to AS 1 ) B. Increases in aggregate demand (AD 1 to AD 2 ) and decrease in aggregate supply (AS 2 to AS 1 ) C. Increases in long-run aggregate supply (AS LR1 to AS LR2 ), aggregate demand (AD 1 to AD 2 ), and short-run aggregate supply (AS
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This note was uploaded on 05/23/2010 for the course ECON 101 taught by Professor Keep during the Spring '10 term at Glendale Community College.

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Pre-Test Chap 35 e18 - Pre-Test Chap 35 e18 Student: _ 1....

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