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Chapter 18 - Extending the Analysis of Aggregate Supply
43. Refer to the above diagram and assume that prices and wages are flexible both upward
and downward in the economy. In the extended AD-AS model:
44. Refer to the above diagram and assume that prices and wages are flexible both upward
and downward in the economy. In the extended AD-AS model:
Chapter 18 - Extending the Analysis of Aggregate Supply
45. Refer to the above diagram and assume that prices and wages are flexible both upward
and downward in the economy. In the extended AD-AS model:
46. Refer to the above diagram. Assume both upward and downward price and wage
flexibility in the economy. In the extended AD-AS model:
Chapter 18 - Extending the Analysis of Aggregate Supply
47. Refer to the above graphs. Growth of production capacity is shown by:
48. Refer to the above graphs. An increase in an economy's labor productivity would shift
curve:
Chapter 18 - Extending the Analysis of Aggregate Supply
49. Refer to the above graphs. An increase in the economy's human capital would shift curve:
50. Inflation in the U.S. economy tends to be:
51. In the absence of unexpected shocks, the economy will tend to experience:
Chapter 18 - Extending the Analysis of Aggregate Supply
52. Refer to the above graphs, where the subscripts on the labels denote years 1 and 2. In year
1 the economy:
Chapter 18 - Extending the Analysis of Aggregate Supply
53. Refer to the above graphs, where the subscripts on the labels denote years 1 and 2. From
the graphs we can conclude that from year 1 to year 2:
54. Refer to the above graphs, where the subscripts on the labels denote years 1 and 2. From
the graphs we can clearly conclude that the economy:
55. The traditional Phillips Curve suggests a tradeoff between:
Chapter 18 - Extending the Analysis of Aggregate Supply
56. The basic problem portrayed by the traditional Phillips Curve is:
57. The traditional Phillips Curve suggests that, if government uses an expansionary fiscal
policy to stimulate output and employment:
Chapter 18 - Extending the Analysis of Aggregate Supply
58. Refer to the above diagram for a specific economy. The curve on this graph is known as
a:
59. Refer to the above diagram for a specific economy. Which of the following best describes
the relationship shown by this curve?
60. Refer to the above diagram for a specific economy. A reduction in structural
unemployment or bottleneck problems in labor markets will:
Chapter 18 - Extending the Analysis of Aggregate Supply
61. Refer to the above diagram for a specific economy. An increase in aggregate demand
will:
62. Refer to the above diagram for a specific economy. Which of the following best describes
a decision by policymakers that moves this economy from point b to point a?
Chapter 18 - Extending the Analysis of Aggregate Supply
63. Refer to the above diagram for a specific economy. The shape of this curve suggests that:
64. Stagflation refers to:
65. Inflation accompanied by falling real output and employment is known as:
Chapter 18 - Extending the Analysis of Aggregate Supply
66. Which of the following allegedly contributed to the stagflation in the mid-1970s?
67. Statistical data for the 1970s and 1980s suggest that:
68. A rightward shift of the traditional Phillips Curve would suggest that:
Chapter 18 - Extending the Analysis of Aggregate Supply
69. Rightward and upward shifts of the Phillips Curve in the 1970s and early 1980s were
caused by:
70. An adverse aggregate supply shock could result from:
71. An adverse aggregate supply shock:
Chapter 18 - Extending the Analysis of Aggregate Supply
72. The last few years of the 1990s in the United States were characterized by:
73. Which of the following is a true statement?
74. Which of the following is a true statement?
Chapter 18 - Extending the Analysis of Aggregate Supply
75. Which of the following is a true statement?
76. In the last half of the 1990s, the usual short-run tradeoff between inflation and
unemployment did not arise because:
77. Suppose that the Consumer Price Index for a particular economy rose from 110 to 120 in
year 1, 120 to 130 in year 2, and 130 to 140 in year 3. We could conclude that this economy is
experiencing:
Chapter 18 - Extending the Analysis of Aggregate Supply
78. Disinflation occurs when:
79. As distinct from reductions in the price level, reductions in the rate of inflation are
referred to as:
80. When the actual rate of inflation is less than the expected rate:
Chapter 18 - Extending the Analysis of Aggregate Supply
81. When the actual rate of inflation exceeds the expected rate:
82. The above diagram is the basis for explaining:
Chapter 18 - Extending the Analysis of Aggregate Supply
83. Refer to the above diagram. The natural rate of unemployment for this economy is:
84. Refer to the above diagram. Assume the economy is initially at point b1. With a time lag
between price and nominal wage adjustments, an increase in aggregate demand will
temporarily move the economy from:
85. Refer to the above diagram and assume the economy is initially at point b1. Which of the
following movements is consistent with the traditional Phillips Curve?
