When inflation occurs, the long-run aggregate supply curve _______________.

slopes upward
shifts leftward
does not shift
shifts rightward

If the money wage rate and other factor prices do not change when the price level rises by 10 percent, _________________.

massive labour lay-offs occur
the short-run aggregate supply curve shifts leftward
there is movement along the short-run aggregate supply curve
the long-run aggregate supply curve shifts leftward

The land of Ur embarks upon a program where all citizens are required to attend 6 years of post-secondary education. As a result, the long-run aggregate supply curve shifts _______ and so does the _______ curve.

rightward; aggregate demand
leftward; short-run aggregate supply
rightward; short-run aggregate supply
leftward; aggregate demand

When the price level increases, _________________________.

aggregate demand increases
aggregate demand decreases
the quantity of real GDP demanded decreases
real GDP remains constant

As the price level rises and other things remain the same, real money balances ___________ and ______________.

increase; the quantity of real GDP demanded increases
decrease; aggregate demand decreases
decrease; the quantity of real GDP demanded decreases
increase; aggregate demand increases

People in the country of Ru expect their incomes to increase next year. As a result, the ______________ will shift _______________.

aggregate demand curve; rightward
long-run aggregate supply curve; rightward
short-run aggregate supply curve; rightward
aggregate demand curve; leftward

Aggregate demand will increase if the quantity of money _________________________.

and transfer payments are decreased
remains constant and tax rates are increased
is decreased and tax rates are increased
is increased and tax rates are decreased

The business cycle is actually a continuous series of different ____________________.

short-run macroeconomic equilibriums
full-employment equilibriums
nominal GDP values
potential GDP values

Starting at full employment, a business cycle can be described by the following sequence: ________equilibrium, ________ equilibrium, _______equilibrium.

below full-employment; full-employment; below full-employment
above full-employment; below full-employment; full-employment
full-employment; below full-employment; above full-employment
below full-employment; full-employment; above full-employment

An economy is at full employment. Which of the following events can create an inflationary gap?

An increase in foreign income
An increase in the wage rate
An increase in the capital stock
An increase in potential GDP