Question

QUESTION 64

1. Inflation occurs over time as a result of

   	a.	long-run aggregate supply increasing faster than short-run aggregate supply.
   	b.	a bigger increase in aggregate demand than aggregate supply.
   	c.	a bigger increase in aggregate demand than in long-run aggregate supply.
   	d.	increases in aggregate demand.

1 points   

QUESTION 65

1. In the short-run macroeconomic equilibrium, real GDP exceeds potential GDP. If aggregate demand does not change the

   	a.	long-run aggregate supply curve will shift rightward as the money wage rate falls.
   	b.	short-run aggregate supply curve will shift leftward as the money wage rate rises.
   	c.	long-run aggregate supply curve will shift rightward as the money wage rate rises.
   	d.	short-run aggregate supply curve will shift rightward as the money wage rate falls.

1 points   

QUESTION 66

1. A Keynesian economist believes that

   	a.	the economy is self-regulating and always at full employment.
   	b.	The economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
   	c.	the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.
   	d.	if the economy was left alone, it would rarely operate at full employment.

1 points   

QUESTION 67

1. A monetarist economist believes that

   	a.	the economy is self-regulating and always at full employment.
   	b.	the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
   	c.	the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.
   	d.	if the economy was left alone, it would rarely operate at full employment.

1 points   

QUESTION 68

1. A classical economist believes that

   	a.	the economy is self-regulating and always at full employment.
   	b.	the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
   	c.	the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.
   	d.	if the economy was left alone, it would rarely operate at full employment.

1 points   

QUESTION 69

1. Answer 2 of the following questions. Type the number of the questions before the answers.

   71. In what two ways might a monopoly be more efficient than a competitive industry?

   72. Why is P=MC=AC not a sufficient condition for long-run competitive equilibrium?

   73. Identify and briefly comment upon the four factors that influence the standard of living yet are not part of the GDP.

   74. What is the quantity theory of money?

   75. Distinguish between factors producing movements along the demand curve from those that cause shifts in aggregate demand.

Answer 1

1 - Option D

Increase in aggregate demand

The increased value of AD , leads to inflation.

2 - Option D

Short run aggregate supply will shift rightward as money wage rate falls

This will increase the AS and hence make it equal to Real AD.

3 - Option C

Economy is self operating and will be at full equilibrium (not always) if fiscal policy is not erratic

4 - Option B

Economy is self regulating and will operate at full employment ( not always) if monetary policy is not erratic