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3. Assume the economy of Andersonland is in a long-run equilibrium with full employment. In the short run, nominal wages are fixed.
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An increase in personal income taxes will most likely cause aggregate demand and aggregate supply to change in which of the following ways in the short run?
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Econ Unit 3

QuestionAnswer
3. Assume the economy of Andersonland is in a long-run equilibrium with full employment. In the short run, nominal wages are fixed.
An increase in personal income taxes will most likely cause aggregate demand and aggregate supply to change in which of the following ways in the short run? AD= decrease, AS= not change
A short-run Phillips curve shows an inverse relationship between Inflation and unemployment
Stagflation is most likely to be caused by (D) a decrease in aggregate supply
4. According to the graph above, an increase in aggregate supply will most likely cause income and employment to change in which of the following ways? E) income=increase, Employment= increase
An increase in aggregate demand will cause which of the following? A movement along a given short-run Phillips curve
Which of the following is true about the marginal propensity to consume? It determines the size of the simple spending multiplier.
58. Which of the following would cause the short-run aggregate supply curve to shift to the right? (E) A decrease in the expected price level
7. Which of the following would be the initial impact on an economy if wages were to increase more than worker productivity? (D) The short-run aggregate supply curve would shift to the left, increasing the price level.
An advance in technology will cause the (E) long-run aggregate supply curve to shift to the right
A simultaneous increase in inflation and unemployment could be explained by an increase in which of the following? (E) Inflationary expectations
15. According to the short-run Phillips curve, lower inflation rates are associated with higher unemployment rates
17. An increase in which of the following would cause the aggregate demand curve to shift to the left? (D) Income taxes
A high marginal propensity to consume implies which of the following? (E) A low marginal propensity to save
Which of the following will most likely occur as a result of an increase in labor productivity in an economy? (A) An increase in output and a decrease in inflation.
According to the graph above, which of the following is true about the long-run equilibrium of the economy depicted? (E) As wages increase, the short-run aggregate supply curve will shift to the left to restore long-run equilibrium.
30. An advance in technology will cause the (E) long-run aggregate supply curve to shift to the right
An increase in which of the following is most likely to promote economic growth? B. investment tax credits
 

 



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