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Quiz_7-solutions econ 410

Quiz_7-solutions econ 410 - of output demanded is and the...

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Quiz 7 3/29/11 1. A difference between the economic long run and the short run is that: A) the classical dichotomy holds in the short run but not in the long run. B) monetary and fiscal policy affect output only in the long run. C) demand can affect output and employment in the short run, whereas supply is the ruling force in the long run. D) prices and wages are sticky in the long run only. Answer: C 2. When the Federal Reserve increases the money supply, at a given price level the amount
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Unformatted text preview: of output demanded is ______ and the aggregate demand curve shifts ______. A) greater; inward B) greater; outward C) lower; inward D) lower; outward Answer: B 3. If the long-run aggregate supply curve is vertical, then changes in aggregate demand affect: A) neither prices nor level of output. B) both prices and level of output. C) level of output but not prices. D) prices but not level of output. Answer: D...
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