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Unformatted text preview: l ‐ Þ equilibrium interest rate ‐ Þ demand for money ‐ Þ quantity of goods and services demanded ˉ 5 Name: ________________________ ID: A 24. When taxes increase, consumption
a. increases, so aggregate demand shifts right.
b. increases, so aggregate supply shifts right.
c. decreases, so aggregate demand shifts left.
d. decreases, so aggregate supply shifts left. 25. The aggregate supply curve is upward sloping in a. the short and long run.
b. neither the short nor long run.
c. the long run, but not the short run.
d. the short run, but not the long run. 26. If the economy is initially at long‐run equilibrium and aggregate demand declines, then in the long run the price level
a. and output are higher than in the original long‐run equilibrium.
b. and output are lower than in the original long‐run equilibrium.
c. is lower and output is the same as the original long‐run equilibrium.
d. is the same and output is lower than in the original long‐run equilibrium. 27. Which of the following will reduce the price level and real output in the short run?
a. an increase in the money supply
b. an increase in oil prices
c. a decrease in the money supply
d. technical progress 28. If the Federal Reserve decided to lower interest rates, it could
a. buy bonds to lower the money supply.
b. buy bonds to raise the money supply.
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This test prep was uploaded on 03/03/2014 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue.
- Spring '08