Question 1

Which of the following will occur because of a rightward shift of the Phillips curve?

Accepted Answer

A)  A rightward shift of aggregate demand.
B)  A decrease in both unemployment and inflation.
C)  A trade-off between unemployment and inflation.
D)  Stagflation.E) A) and C)
F) All of the above

Question 2

Demand-side policies alone result in which of the following?

Accepted Answer

A)  A shift of the Phillips curve to the left.
B)  A movement along the Phillips curve.
C)  A shift of the Phillips curve to the right.
D)  Stagflation.E) A) and B)
F) A) and C)

Question 3

Investment in human capital shifts the aggregate supply curve leftward.

Accepted Answer

A) True 
 B)False

Question 4

The Fair Labor Standards Act of 1938

Accepted Answer

A)  Set a minimum wage of 25 cents per hour.
B)  Eliminated minimum wages created during World War I.
C)  Established maximum work hours per day.
D)  Granted women the right to work in nonclerical occupations.E) All of the above
F) None of the above

Question 5

A movement along the Phillips curve shows that the unemployment rate and inflation rate are

Accepted Answer

A)  Inversely related to each other.
B)  Directly related to each other.
C)  Changing in response to shifts in aggregate supply.
D)  Changing in response to supply-side policy.E) A) and D)
F) C) and D)

Question 6

A rightward shift of the Phillips curve implies an increase in both unemployment and inflation.

Accepted Answer

A) True 
 B)False

Question 7

According to supply-side theory,which of the following would shift the aggregate supply curve leftward?

Accepted Answer

A)  An increase in unemployment and welfare benefits.
B)  Lower marginal tax rates.
C)  Government deregulation.
D)  An increase in the money supply.E) None of the above
F) A) and B)

Question 8

In the simple Keynesian model,

Accepted Answer

A)  Inflation becomes a problem only if demand increases at full employment.
B)  Inflation is a problem whenever demand increases.
C)  Inflation is never a problem.
D)  Inflation is a problem whenever demand decreases.E) All of the above
F) None of the above

Question 9

Which of the following contributes to stagflation?

Accepted Answer

A)  Price ceilings.
B)  Lowering marginal tax rates.
C)  Discrimination that prevents the most productive employee from being hired.
D)  Job training programs that train workers to perform economically useful jobs.E) B) and D)
F) A) and B)

Question 10

A rightward shift in aggregate demand will cause an increase in output and no change in the price level if aggregate supply is

Accepted Answer

A)  Upward-sloping to the right.
B)  Vertical.
C)  Downward-sloping to the right.
D)  Horizontal.E) A) and B)
F) C) and D)

Question 11

In 2003,tax rates on dividends and capital gains were ________,making investment ________.

Accepted Answer

A)  increased;more profitable
B)  increased;less profitable
C)  reduced;more profitable
D)  reduced;less profitableE) A) and B)
F) All of the above

Question 12

A horizontal aggregate supply curve below the level of full employment is most consistent with which of the following views of the economy?

Accepted Answer

A)  Keynesian.
B)  Monetarist.
C)  Supply-side.
D)  Consensus.E) A) and C)
F) A) and B)

Question 13

Increased investment in infrastructure will shift

Accepted Answer

A)  The Phillips curve to the right.
B)  Aggregate supply to the right and aggregate demand to the left.
C)  Both aggregate supply and aggregate demand to the right.
D)  Both the Phillips curve and aggregate demand to the left.E) A) and B)
F) B) and C)

Question 14

According to supply-side theory,which of the following would cause a leftward shift in the aggregate supply curve?

Accepted Answer

A)  Increasing government regulations.
B)  Reducing the minimum wage.
C)  Reducing discrimination in employment.
D)  Eliminating excessive government regulation.E) A) and B)
F) None of the above

Question 15

Extreme monetarists assert that changes in the money supply

Accepted Answer

A)  Affect prices and real GDP.
B)  Can affect only the price level.
C)  Can affect only real GDP.
D)  Affect prices and the unemployment rate.E) A) and B)
F) All of the above

Question 16

Which of the following is a goal of supply-side policy?

Accepted Answer

A)  A steeper slope for the Phillips curve.
B)  A lower rate of inflation at every unemployment rate.
C)  A movement along the Phillips curve.
D)  A leftward shift in the aggregate demand curve.E) A) and D)
F) None of the above

Question 17

A World View article titled "Japan Sees Quake Damage Bill of Up to $309 Billion,Almost Four Katrinas" implies that the most likely impact from power shortages from this destruction would be

Accepted Answer

A)  An increase in GDP.
B)  A leftward shift of aggregate supply.
C)  A decrease in inflation.
D)  A rightward movement down the Phillips curve.E) B) and D)
F) A) and B)

Question 18

Tax incentives that encourage saving,investment,and work will shift the AS curve to the right.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following will cause an increase in unemployment and inflation at the same time?

Accepted Answer

A)  A rightward shift of aggregate supply.
B)  A rightward shift of aggregate demand.
C)  A leftward shift of aggregate supply.
D)  A leftward shift of aggregate demand.E) B) and D)
F) A) and C)

Question 20

Deregulation will cause the Phillips curve to shift to the right.

Accepted Answer

A) True 
 B)False

Exam 16: Supply-Side Policy: Short-Run Options

A movement along the Phillips curve shows that the unemployment rate and inflation rate are

Correct AnswerverifiedShow Answer

Extreme monetarists assert that changes in the money supply

Correct AnswerverifiedShow Answer

In the simple Keynesian model,

Correct AnswerverifiedShow Answer

Which of the following will occur because of a rightward shift of the Phillips curve?

Correct AnswerverifiedShow Answer

Demand-side policies alone result in which of the following?

Correct AnswerverifiedShow Answer

In 2003,tax rates on dividends and capital gains were ________,making investment ________.

Correct AnswerverifiedShow Answer

A rightward shift of the Phillips curve implies an increase in both unemployment and inflation.

Correct AnswerverifiedShow Answer

According to supply-side theory,which of the following would shift the aggregate supply curve leftward?

Correct AnswerverifiedShow Answer

Increased investment in infrastructure will shift

Correct AnswerverifiedShow Answer

A horizontal aggregate supply curve below the level of full employment is most consistent with which of the following views of the economy?

Correct AnswerverifiedShow Answer

Investment in human capital shifts the aggregate supply curve leftward.

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Deregulation will cause the Phillips curve to shift to the right.

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The Fair Labor Standards Act of 1938

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Which of the following is a goal of supply-side policy?

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Which of the following contributes to stagflation?

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A World View article titled "Japan Sees Quake Damage Bill of Up to $309 Billion,Almost Four Katrinas" implies that the most likely impact from power shortages from this destruction would be

Correct AnswerverifiedShow Answer

According to supply-side theory,which of the following would cause a leftward shift in the aggregate supply curve?

Correct AnswerverifiedShow Answer

Tax incentives that encourage saving,investment,and work will shift the AS curve to the right.

Correct AnswerverifiedShow Answer

Which of the following will cause an increase in unemployment and inflation at the same time?

Correct AnswerverifiedShow Answer

A rightward shift in aggregate demand will cause an increase in output and no change in the price level if aggregate supply is

Correct AnswerverifiedShow Answer

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In 2003,tax rates on dividends and capital gains were ,making investment .

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