In: Business and Management

Submitted By wongkayan
Words 1307
Pages 6

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) In the aggregate supply relation, the current price level depends upon
A) expected price level.
B) monetary policy.
C) fiscal policy.
D) consumer confidence.
E) all of the above
2) Based on the aggregate supply relation, an increase in current output will cause
A) a shift of the aggregate supply curve.
B) an increase in the current price level.
C) a change in the expected price level this year.
D) an increase in the expected price level and an upward shift of the AS curve.
E) an increase in the markup over labor costs.
3) The aggregate demand curve will shift to the right when which of the following occurs?
A) a reduction in the money supply
B) a reduction in consumer confidence
C) a rise in the price level
D) a reduction in taxes
E) a decrease in the price level
4) Assume the economy is initially operating at the natural level of output. Now suppose a budget is passed that calls for an increase in government spending. This increase in government spending will, in the short run, cause an increase in
A) the interest rate.
B) the price level.
C) the nominal wage.
D) all of the above
E) none of the above
5) Assume the economy is initially operating at the natural level of output. Suppose that individuals decide to decrease their saving. We know that this decreased desire to save will be "neutral" in
A) the short run, but not the medium run.
B) the medium run, but not the long run.
C) neither the medium run nor the short run.
D) both the short run and the medium run.
E) none of the above


6) An increase in the price of oil will cause which of the following in the medium run?
A) no change in the level of output
B) no change in the price level
C) an increase in the unemployment…...

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