Refer to Exhibit 6.Suppose the economy is in long-run equilibrium at point E. A sudden increase in government spending should move the economy in the direction of point ?

Related Mcqs:

The misery index Which some commentators suggest measures the health of the economy, is ?

A. The sum of the growth rate of output and the inflation rate B. The sum of the natural rate of unemployment and the actual rate of unemployment C. The sum of the inflation rate and the central bank’s refinancing rate D. The sum of the unemployment rate and the inflation rate...

The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?

A. decreases unemployment B. decrease growth C. increases unemployment D. decreases inflation...

The original Phillips curve illustrates ?

A. the trade-off between inflation and unemployment B. The trade-off between output and unemployment C. The positive relationship between output and unemployment D. The positive relationship between inflation and unemployment...

A decrease the Price of foreign oil ?

A. Shifts the short-run Phillips curve downward and make the unemployment inflation trade-off less favorable B. Shifts the short run Phillips curve upward and makes the unemployment inflation trade-off more favorable C. Shifts the short run Phillips curve upward and makes the Unemployment inflation trade off more favorable D. Shifts the short run Phillips curve … A decrease the Price of foreign oil ?Read More...

If people have rational expectations a monetary policy contraction that is announced and is credible could ?

A. reduce inflation with little or no increase in unemployment B. Increase inflation but would decrease unemployment by an unusually large amount C. increase inflation with little or no decrease in unemployment D. reduce inflation but it would increase unemployment by an unusually large amount...