question
A fall in the real wage rate ________ firms' profits and leads to ________ in the quantity supplied.
answer
raises; an increase
question
If the price level increases from 110.0 to 115.0, the quantity of ________.
answer
real GDP supplied will increase
question
The aggregate supply curve shifts rightward when ________.
answer
the money wage rate falls
question
An increase in potential GDP ________ aggregate supply and ________.
answer
increases; shifts the AS curve rightward
question
A change in the price level produces a ________ the aggregate demand curve.
i. shift in
ii. change in the slope of
iii. movement along
i. shift in
ii. change in the slope of
iii. movement along
answer
iii only
question
Aggregate demand ________ and shifts the AD curve ________ when ________.
answer
decreases; leftward; foreign incomes decrease
question
If the economy is at macroeconomic equilibrium, then real GDP ________.
answer
might be equal to, greater than, or less than potential GDP
question
Starting from a situation of full employment, an increase in aggregate demand creates ________ and ________ the price level.
answer
an inflationary gap; raises
question
Which of the following factors could start a demand-pull inflation?
answer
an increase in the quantity of money
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