Question

Changes in input prices generally do not cause the LRAS curve to shift. Group of answer...

Changes in input prices generally do not cause the LRAS curve to shift. Group of answer choices True False An increase in G and/or a tax cut would be expected to result in an: Group of answer choices inward shift in AD. outward shift in AD. inward shift in AS. outward shift in AS. Federal Reserve monetary policy impacts: Group of answer choices AD AS doesn't impact either AD or AS. analysis isn't supported by the AD/AS model.

Homework Answers

Answer #1

1. Changes in input prices generally do not cause the LRAS curve to shift.

Ans. This statement is TRUE. It is because LRAS curve shift with the change in productivity or if the inputs are increased in the economy. Incrase in input price only cause SRAS to shift.

2. An increase in G and/or a tax cut would be expected to result in an:

Correct Option: outward shift in AD.

Reason: It is because this G is the positive component of AD and tax is the negative component of AD.

3. Federal Reserve monetary policy impacts:

Correct Option: either AD or AS

Reason: It is because this monetary policy has effect on the money available to the consumer and this hampers the AD.

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