A rightward shift in the short-run aggregate supply curve will occur when
(A)exports exceed imports
(B)the money supply increases
(C)the prices of imported raw materials increase
(D)the stock of physical capital increases
(E)unions have negotiated a wage increase for their members
An increase in which of the following leads to an increase in output per worker?
(A)Income tax rates
(B)Real interest rate
(C)The labor-force participation rate
(D)The stock of physical capital per worker
(E)The number of workers per unit of capital
An increase in which of the following would most likely result in an increase in aggregate supply?
(A)The price level
(B)Aggregate demand
(C)Unemployment compensation
(D)Labor-force participation rate
(E)The minimum wage
An increase in which of the following will most likely increase productivity?
(A)Population growth rate
(B)Aggregate demand
(C)Capital stock
(D)Consumption
(E)Employment
The short-run aggregate supply curve would be vertical if
(A)nominal wages adjust immediately to changes in the price level
(B)nominal wages adjust slowly when there is unemployment
(C)both nominal wages and prices adjust slowly to changes in aggregate demand
(D)the spending multiplier is very low
(E)investment demand is very responsive to changes in interest rates
In the short run, which of the following will most likely result if wages in an economy rise faster than workers’
productivity?
(A)An increase in the price level
(B)An increase in firms’ profits
(C)An increase in efficiency in labor-intensive industries
(D)A larger increase in property income than in labor income
(E)A decrease in import prices
An increase in which of the following is most likely to cause the short-run aggregate supply curve to shift to the left?
(A)Consumers’ incomes
(B)The money supply
(C)Government spending
(D)The optimism of business firms
(E)The per unit cost of production
Which of the following would be the initial impact on an economy if wages were to increase more than worker
productivity?
(A)There would be no initial impact, since neither the aggregate supply curve nor the aggregate demand curve would
shift.
(B)Employment would increase, causing a rightward shift in the aggregate demand curve.
(C)The price level would increase, resulting in excess aggregate supply.
(D)The short-run aggregate supply curve would shift to the left, increasing the price level.
(E)The aggregate demand curve would shift to the left, increasing the price level.
If marginal business tax rates are decreased, how will aggregate supply and employment change in the long run?
(A)Aggregate Supply = Increase ; Employment = Increase
(B)Aggregate Supply = Increase ; Employment = Decrease
(C)Aggregate Supply = Decrease ; Employment = Increase
(D)Aggregate Supply = Decrease ; Employment = Decrease
(E)Aggregate Supply = Not change ; Employment = Increase
Which of the following is true of a horizontal aggregate supply curve?
(A)It is the usual assumption made by classical economists analyzing the long run.
(B)It suggests that increases in output can occur without increases in price levels.
(C)It suggests that a shift in the aggregate demand curve will lead to a change in the price level.
(D)It is likely to occur only in highly industrialized economies.
(E)It cannot shift, therefore output remains constant.
A decrease in the prices of inputs will cause which of the following to occur in the short run?
(A)An increase in the aggregate demand and an increase in the price level
(B)A decrease in the aggregate demand and an increase in the price level
(C)An increase in the short-run aggregate supply and a decrease in the price level
(D)An increase in the short-run aggregate supply and an increase in the price level
(E)A decrease in the short-run aggregate supply and a decrease in the price level
A decrease in labor productivity will shift the
(A)aggregate demand curve to the right
(B)aggregate demand curve to the left
(C)long-run aggregate supply curve to the right
(D)short-run aggregate supply curve to the right
(E)short-run aggregate supply curve to the left
A change in which of the following will cause the short-run aggregate supply curve to shift?
I.The price level
II.Government spending
III.The cost of all inputs
(A)I only
(B)II only
(C)III only
(D)I and II only
(E)I, II, and II
The short-run aggregate supply curve is likely to shift to the left when there is an increase in
(A)the cost of productive resources
(B)productivity
(C)the money supply
(D)the federal budget deficit
(E)imports
Which of the following would most likely cause a rightward shift in an economy's aggregate supply curve?
(A)An increase in interest rates
(B)A tax increase of 50 cents per gallon for gasoline
(C)An across-the-board reduction of wages in the manufacturing sector
(D)The passage of legislation mandating a reduction in automobile pollution
(E)The shutdown of plants and movement of production of goods abroad