Macro Exam 3- Chapter9

Which of the following might cause a change in short-run aggregate supply?

Businesses are increasingly optimistic about the future.

A tax decrease on producers will shift the aggregate supply curve to the left.

false

Which of the following items is NOT a determinant of aggregate demand?

government saving

The shift in aggregate demand depicted may be due to a

increase in income taxes

A(n) _____ in productivity and a(n) _____ in taxes will shift short-run aggregate supply to the right.

increase;decrease

In Productovia, aggregate demand increases and aggregate supply decreases. Based on the shifts of these two curves, which of the following is a likely outcome?

inflation

According to the wealth effect, as prices fall, people feel wealthier and purchase more goods and services.

true

The long-run aggregate supply curve represents the full-employment capacity of the economy.

true