1.- In response to a negative supply shock, the government decreases taxes. The
ID: 1162634 • Letter: 1
Question
1.-
In response to a negative supply shock, the government decreases taxes. The most likely result would be
A. lower unemployment and a lower price level
B. higher unemployment and a higher price level
C. lower unemployment and a higher price level
D. higher unemployment and a lower price level
2.-
Which of the following characterizes business cycles?
A. They are mainly fluctuations in consumption.
B. They are easily predicted by competent economists.
C. They are no longer very important due to government stabilization policies.
D. They are fluctuations in real GDP and related variables over time.
3.- Which of the following would not be expected to shift the long-run aggregate-supply curve to the right?
A. a large increase in the minimum wage
B. an increase in immigration
C. opening up international trade
D. a large decrease in the minimum wage
In response to a negative supply shock, the government decreases taxes. The most likely result would be
A. lower unemployment and a lower price level
B. higher unemployment and a higher price level
C. lower unemployment and a higher price level
D. higher unemployment and a lower price level
2.-
Which of the following characterizes business cycles?
A. They are mainly fluctuations in consumption.
B. They are easily predicted by competent economists.
C. They are no longer very important due to government stabilization policies.
D. They are fluctuations in real GDP and related variables over time.
3.- Which of the following would not be expected to shift the long-run aggregate-supply curve to the right?
A. a large increase in the minimum wage
B. an increase in immigration
C. opening up international trade
D. a large decrease in the minimum wage
Explanation / Answer
1. (c) lower unemployment and a higher price level.
2. (a) They are mainly fluctuations in consumption.
3. (a) A large increase in the minimum wage.
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