04 Jun Question 1. The positive relationship between the price level and the amou
Question
1.
The positive relationship between the price level and the amount of output means that the aggregate supply curve is:
A.
horizontal.
B.
upward-sloping.
C.
vertical.
D.
downward-sloping.
2.
In the sticky-price model, if the fraction of firms in the economy that set prices in advance rises, then it would be expected that the aggregate supply curve:
A.
shifts upward.
B.
shifts downward.
C.
becomes steeper.
D.
becomes flatter.
3.
Which of the following will shift the aggregate supply curve up to the left?
A.
an increase in the price level
B.
a decrease in the level of output
C.
an increase in the expected price level
D.
a decrease in the price level
4.
Exhibit: AD–AS Shifts
http://bcs.worthpublishers.com/webpub/Economics/mankiw8_bridge/testbank_images/chapter_14_aggregate_supply_and_the_short-run_tradeoff/r1-1.png
Reference: Ref 14-1
(Exhibit: AD–AS Shifts) Starting from long-run equilibrium at A with output equal to http://bcs.worthpublishers.com/webpub/Economics/mankiw8_bridge/testbank_images/chapter_14_aggregate_supply_and_the_short-run_tradeoff/q28-1.png and the price level equal to P1, if there is an unexpected monetary contraction that shifts aggregate demand from AD1 to AD3, then the short-run nonneutrality of money is represented by the movement from:
A.
A to B
B.
A to G
C.
A to C
D.
A to D
5.
Exhibit: AD–AS Shifts
http://bcs.worthpublishers.com/webpub/Economics/mankiw8_bridge/testbank_images/chapter_14_aggregate_supply_and_the_short-run_tradeoff/r1-1.png
Reference: Ref 14-1
(Exhibit: AD–AS Shifts) Starting from long-run equilibrium at A with output equal to http://bcs.worthpublishers.com/webpub/Economics/mankiw8_bridge/testbank_images/chapter_14_aggregate_supply_and_the_short-run_tradeoff/q29-1.png and the price level equal to P1, if there is an unexpected monetary contraction that shifts aggregate demand from AD1 to AD3, then the long-run neutrality of money is represented by the movement from:
A.
A to B
B.
A to G
C.
A to C
D.
A to D
6.
Starting from the natural level of output, an unexpected monetary contraction will cause output and the price level to ______ in the short run; and in the long run the expected price level will ______, causing the level of output to return to the natural level.
A.
increase; increase
B.
increase; decrease
C.
decrease; decrease
D.
decrease; increase
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