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

shifts rightward
slopes upward
does not shift
shifts leftward

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

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

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.

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

When the price level increases, _________________________.

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

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

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

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

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

Aggregate demand will increase if the quantity of money _________________________.

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

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

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

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

above full-employment; below full-employment; full-employment
full-employment; below full-employment; above full-employment
below full-employment; full-employment; below 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 potential GDP
An increase in the capital stock
An increase in wages
An increase in foreign income

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