A leftward shift of the aggregate supply curve may be caused by: a. increase in
ID: 1204080 • Letter: A
Question
A leftward shift of the aggregate supply curve may be caused by: a. increase in productivity b. decrease in the prices of domestic resources c. increase in the prices of imported resources d. decrease in business taxes. 13. A rightward shift in the aggregate supply curve may be caused by: a increase in business taxes b. increase in the prices of domestic resources c. a reduction in the government regulations d. increase in prices of imported resources. 14. Other things being equal, the improvement in productivity will: a. shift the aggregate supply curve to the right b. shift the aggregate supply curve to the left c. shift the aggregate demand curve to the left d. increase the price level. 15. A rightward shift in the aggregate supply curve can be explained by a increase in: a. business taxes b. productivity c. wages d. increase in prices of inputs. 16. The economy's long run supply curve: a. slopes upward and to the right b. is vertical c. Is horizontal d. slopes downward and to the nght. 17. Productivity measures: a. per unit production costs b. changes in real wealth caused by changes in price level c. amount of capital goods used per worker d. real output per unit of input. 18. Which of the following will NOT shift the aggregate supply cirve? a. increase in the pnee level b. increase in productivity c. decline in business taxes d. Increase in government regulations. 19. The most important determinant of consumption and saving is: a. level of bank credit b. level of income c. interest rate d. price level. 20. The MPC can be defined as that fraction of a: a. change in income that is not spent b. given total income that is consumed c. change in income that is spent d. given total income that is not consumed. 21. The 45 degree line on the graph regarding consumption and income shows: a. all points where MPC is constant b. all points where saving and income are equal c. amounts that households will save at each possible level of income d all the points at which consumption and income are equal. 22. The APC is calculated as: a. change in consumption/change in income c. change in saving/change in income c. consumption/income d. income/consumption 23. Which of the following is correct? a. APC+MPC = 1 b. APS + MPS = 1 c.APC + APS = 1 d. APC + MPS = 1. 24. The size of MPC is assumed to be: a. less than zero b. more than one c. more than zero, but less than one d. two or more. 25. As disposable income increases, consumption: a. and saving both increase b. decreases and saving increases c. increases and saving decreases d. and saving both decrease.Explanation / Answer
12.
(c) increase in prices of imported resources
An increase in price of imported resources (inputs) will increase the production costs of producers, thereby reducing AS and shifting the curve leftwards.
13.
(c) a reduction in the government regulation
A reduction in government regulation would make production activities easier and less expensive for producers, thereby increasing AS and shifting the curve rightwards.
14.
(a) shift the aggregate supply curve to the right
An improvement in productivity will increase production capacity of firms, using the same resources. As a result, production will increase, thereby increasing the AS and thus shifting the AS curve to the right.
15.
(b) productivity
An improvement in productivity will increase production capacity of firms, using the same resources. As a result, production will increase, thereby increasing the AS and thus shifting the AS curve to the right.
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