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Unit_V_exam.F10.V1 - *CLASS SET AP MACROECONOMICS Unit V...

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*CLASS SET* AP MACROECONOMICS Unit V Exam 1. According to the classical model, an increase in the money supply causes an increase in which of the following? I. The price level II. Nominal gross domestic product III. Nominal wages A. I only B. II only C. III only D. II and III only E. I, II, and III 2. Which of the following is a possible cause of stagflation (simultaneous high unemployment and high inflation)? 3. Supply-side economists argue that A. a cut in high tax rates results in an increased deficit and thus increases aggregate supply. B. lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right. C. the aggregate supply of goods can only be increased if the price level falls. D. increased government spending should be used to stimulate the economy. E. the government should regulate the supply of imports. 4. An increase in which of the following is most likely to increase the long-run growth rate of an economy’s real per capita income? 5. An increase in which of the following is most likely to cause an improvement in the standard of living over time? 6. The long-run aggregate supply curve is likely to shift to the right when there is A. an increase in the cost of productive resources B. an increase in productivity C. an increase in the federal budget deficit D. a decrease in the money supply E. a decrease in the labor force 7. Which of the following is true of supply shocks?
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