Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve.
A) is greater than; intersect at a point to the left of B) equals; intersect at a point on
C) equals; intersect at a point to the right of D) is less than; intersect at a point to the right of
Ques. 2The short-run Phillips curve will not shift unless there is
A) an increase in inflation that is unanticipated. B) a decrease in inflation that is unanticipated.
C) a change in inflation expectations. D) an increase in the unemployment rate.
Ques. 3All of the following are reasons why China is unlikely to maintain high enough rates of productivity growth to catch-up with the standard of living in the United States except
A) because of the low birth rate in China, the labor force will soon decline.
B) much of China's growth is likely due to the transition from a centrally-planned economy to a market economy.
C) the Chinese migration of rural workers to more productive urban jobs.
D) the United States invests more in research and development. than does China.
Ques. 4Planned aggregate expenditure is equal to
A) consumption spending plus planned investment spending.
B) consumption spending plus planned investment spending plus government purchases plus net exports.
C) planned investment spending only.
D) consumption spending only.
Ques. 5If the Fed orders an expansionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
Ques. 6Disposable personal income is defined as
A) personal income less personal taxes.
B) personal income less personal taxes plus indirect sales taxes.
C) personal income less transfer payments plus personal taxes.
D) personal income less depreciation.
Ques. 7How will a government-imposed minimum wage affect the equilibrium level of employment in a competitive labor market and in a monopsony labor market?
What will be an ideal response?
Ques. 8If strong aggregate demand is pushing the economy beyond potential real GDP, which of the following must be true?
A) Expansionary monetary policies will push the economy back to the long-run Phillips curve.
B) The economy is at an equilibrium that is not on the long-run Phillips curve.
C) The economy is at an equilibrium that is on the long-run aggregate supply curve.
D) The economy is at an equilibrium that is on the long-run Phillips curve.
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