15. When nominal wages adjust more slowly than changes in the price level, then

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15. When nominal wages adjust more slowly than changes in the price level, then the aggregate supply schedule is: a. downward sloping. b. upward sloping. c. horizontal. d. vertical. e. shaped like a parabola. 16. In the short run, an increase in the quantity of money results in: a. a leftward shift of the aggregate demand schedule, a lower price level, and a higher real GDP. b. a rightward shift of the aggregate demand schedule, a higher price level, and a higher real GDP. c. a rightward shift of the aggregate supply schedule, a lower price level, and a higher real GDP. d. a leftward shift of the aggregate demand schedule, a higher price level, and a lower real GDP. e. shifts in both the curves leaving prices at a lower level. 17. Monetary policy can affect the price level: a. in both the short run and the long run. b. neither in the short run nor the long run. c. only in the short run. d. only in the long run. 18. When the price level falls, the level of AD rises, as illustrated by the downward sloping curve shown on a graph. This is because as the average price falls: a. our fixed income buys more stuff. b. our fixed wages buys more stuff. c. our fixed money holdings buy more stuff. d. our fixed savings frees up resources to buy more stuff. e. All of the above. 19. The classical long run view of the economy shows that changes in AD will: a. have no effect on the level of production. b. have no effect on the price level. c. have an unpredictable effect on the price level. d. Both A and B are true. e. Both A and C are true. 20. The AS/AD model is unable to show a situation in which we have _____ and _____ at the same time. a. inflation; growth b. deflation; growth c. inflation; depression d. deflation; depression e. inflation; deflation. 21. Which of the following is most associated with Monetarism? a. Flaws in the market are the cause of economic disruption. b. Investment falls because of a lack of “animal spirits.” c. Monetary rules are preferred to discretionary policy. d. Increasing government spending is the most reliable way to a successful economic recovery. e. All of the above. 22. Which of the following has been relatively stable over the last thirty years? a. The velocity of M1. b. The velocity of M2. c. The velocity of MZM. d. All of the above. e. None of the above. 23. According to the Austrian business cycle theory which of the following is true about the economy? a. The fact that there is widespread business failure does not mesh with our understanding of how markets work. b. The broad disturbance in our economy points to a monetary cause. c. It is long-term capital investments that suffer the most. d. All of the above. e. None of the above. 24. This economist won a Nobel prize in economics for his work on business cycle theory: a. Lionel Robbins. b. F. A. Hayek. c. J. M. Keynes. d. Ludwig von Mises. e. Karl Marx. 25. To illustrate the dot-com boom Woods cites the example of: a. Microsoft, whose stock prices fell by 23%. b. Apple, whose innovative Ipod caused its stock prices to triple. c. Home Depot, whose IPO was very disappointing, with prices at two-thirds of that expected. d. Toys-R-Us, which was bankrupt before the bust even began. e. Netscape, whose IPO made owners multimillionaires even though it had never made a profit.

Explanation / Answer

15 answer is upward sloping

16 b A rightwards shift of aggregate demand higher price level and real income

17 a in both short run and longrun. Note it is price level not GDP or unemployment(they are raised or decreased only in short run)

18 our fixed wages buy more stuff

Can answer only 4 parts according to chegg policy. Please send other parts as separate question

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