Question

Question 11 pts

The aggregate supply curve

is vertical in the short run.

slopes downward because of sticky wages and prices.

is vertical in the long run.

slopes downward largely because of the trade effect and wealth effect.

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Question 21 pts

The aggregate supply curve

is vertical in the short run.

slopes downward because of sticky wages and prices.

is vertical in the long run.

slopes downward largely because of the trade effect and wealth effect.

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Question 31 pts

The best example of a leftward shift in AS to occur in the modern U.S. economy occurred in:

1960s

1970s

1980s

1990s

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Question 41 pts

The traditional Phillips curve derives its shape from the:

short run aggregate supply curve.

short run fluctuations in aggregate supply.

long run aggregate supply curve.

long run fluctuations in aggregate supply.

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Question 51 pts

Which is NOT a reason that an aggregate supply curve might slope upward to the right?

As production increases, people want to buy less.

As production increases, wages are bid up.

As production increases, interest rates rise.

As output prices rise, producers expand output.

Answer 1

11) The aggregate supply curve is is vertical in the long run due to full employment of resources.

31) The best example of a leftward shift in AS to occur in the modern U.S. economy occurred in: 1970s due to the oil price shock.

41) The traditional Phillips curve derives its shape from the Short run fluctuations in aggregate supply. It showed changes in the level of unemployment have a direct and inverse effect on the level of price inflation.

51) The reason that an aggregate supply curve might slope upward to the right is as production increases, people want to buy less. People's willingness to buy less is a demand side factor and not supply.