1) If wages and prices are perfectly flexible, a decrease in aggregate demand wi
ID: 2496517 • Letter: 1
Question
1) If wages and prices are perfectly flexible, a decrease in aggregate demand will cause a(n): A. increase in the price level and unemployment. B. decrease in the price level and employment. C. increase in the price level and no change in employment. D. decrease in the price level and no change in employment. E. decrease in the price level and decrease in unemployment
2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output.
3) Classical economic theory describes agricultural economies fairly well because: A. early agricultural economies used barter rather than money. B. the short-run aggregate supply curve in an agricultural economy is vertical. C. agricultural economies are immune to recessions. D. agricultural economies don't need fiscal policy. E. agricultural economies cannot be described with the tools of supply and demand analysis.
1) If wages and prices are perfectly flexible, a decrease in aggregate demand will cause a(n): A. increase in the price level and unemployment. B. decrease in the price level and employment. C. increase in the price level and no change in employment. D. decrease in the price level and no change in employment. E. decrease in the price level and decrease in unemployment
2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output.
3) Classical economic theory describes agricultural economies fairly well because: A. early agricultural economies used barter rather than money. B. the short-run aggregate supply curve in an agricultural economy is vertical. C. agricultural economies are immune to recessions. D. agricultural economies don't need fiscal policy. E. agricultural economies cannot be described with the tools of supply and demand analysis.
1) If wages and prices are perfectly flexible, a decrease in aggregate demand will cause a(n): A. increase in the price level and unemployment. B. decrease in the price level and employment. C. increase in the price level and no change in employment. D. decrease in the price level and no change in employment. E. decrease in the price level and decrease in unemployment
2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output.
1) If wages and prices are perfectly flexible, a decrease in aggregate demand will cause a(n): A. increase in the price level and unemployment. B. decrease in the price level and employment. C. increase in the price level and no change in employment. D. decrease in the price level and no change in employment. E. decrease in the price level and decrease in unemployment A. B. C. D. E.
2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output.
2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output. 2) In the classical model, an increase in the money supply leads, other things equal: A. to an equal proportional rise in the aggregate output, with no effect on the aggregate price level. B. to an equal proportional fall in the aggregate price level, with no effect on aggregate output. C. to an equal proportional rise in the aggregate price level, with no effect on aggregate output. D. to an equal proportional fall in the aggregate output, with no effect on aggregate price level. E. to an equal proportional rise in the aggregate price level, with an equal proportional rise on aggregate output.
3) Classical economic theory describes agricultural economies fairly well because: A. early agricultural economies used barter rather than money. B. the short-run aggregate supply curve in an agricultural economy is vertical. C. agricultural economies are immune to recessions. D. agricultural economies don't need fiscal policy. E. agricultural economies cannot be described with the tools of supply and demand analysis. A. B. C. D. E. A. increase in the price level and unemployment. B. decrease in the price level and employment. C. increase in the price level and no change in employment. D. decrease in the price level and no change in employment. E. decrease in the price level and decrease in unemployment
Explanation / Answer
1. decrease in the price level and no change in employment.
2. an equal proportional rise in the aggregate price level, with no effect on aggregate output.
3. agricultural economies are immune to recessions.
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