23 102 Workers and firms both expect that prices will be 25 higher next year

# 23 102 workers and firms both expect that prices will

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102) Workers and firms both expect that prices will be 2.5% higher next year than they are this year.As a result,A) workers will be willing to take lower wages next year, but not lower than a 2.5 percentdecrease.B) the short-run aggregate supply curve will shift to the left as wages increase.C) the purchasing power of wages will rise if wages increase by 2.5%.D) aggregate demand will increase by 2.5%.Answer: B102)Page Ref: 829/447Learning Outcome: Macro-7: Use the aggregate supply-aggregate demand model to explain aggregatefluctuations in output and inflation.103) Which of the following would cause the short-run aggregate supply curve to shift to the right?103)Page Ref: 828/446Learning Outcome: Macro-6: Explain the aggregate supply-aggregate demand model.Figure 13-2104)Refer to Figure 13-2.Ceteris paribus, an increase in the labor force would be represented by amovement fromB.D) pointBto pointA.104)Page Ref: 830/448Learning Outcome: Macro-7: Use the aggregate supply-aggregate demand model to explain aggregatefluctuations in output and inflation.24
105)Refer to Figure 13-2.Ceteris paribus, a decrease in the capital stock would be represented by amovement fromB.D) pointBto pointA.105)Page Ref: 830/448Learning Outcome: Macro-7: Use the aggregate supply-aggregate demand model to explain aggregatefluctuations in output and inflation.106)Refer to Figure 13-2.Ceteris paribus, an increase in productivity would be represented by amovement fromA)SRAS1toSRAS2.B)SRAS2toSRAS1.C) pointAto pointAnswer: AB.D) pointBto pointA.106)Page Ref: 830/448Learning Outcome: Macro-7: Use the aggregate supply-aggregate demand model to explain aggregatefluctuations in output and inflation.