econ

Which of the following events shifts the short-run aggregate-supply curve to the right.

a drop in the oil prices

If the marginal propensity to consume (MPC) IS .075, the calue of the multiplier is

4.0

Suppose the price level falls. Because of fixed norinal wage contracts,firms become less profitable and they cut back on production. This is a demonstration

Sticky-wage theory of the short-run aggregate- supply curve

Suppose the economy is operationg at the point D. As people revise their price expectations

The short- run phillips curve will shift in the direction of the short-runcurve associated with an expectation of 9 percent inflation

The initial impact of an increase in goverment spending is to shift?

aggregate demand to the right

WHich of the following would not cause a shift in the long-run aggregate-supply curve?

an increase in price expectations

Which of the following would not cause a shift in the long-run aggregate?

an increase in the price expectation

From 2008-2009 the federal Reserve created a very large increase in the money supply. According to the short-run Phillips curve this policy should have

raised inflation and reduced unemployment

An increase in the marginal prospensity to consume (MPC)

raises the value of the multiplier

In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to

shift aggregate demand to the right

Suppose the economy is operation in a recession such as point B in Exhibit 4. If policymakers wished to move output its long-run natural rate, they should attempt

shift aggregate demand to the right

Suppose the goverment increases its purchases by $16 billion. If the multiplier effect eceeds the crowding-out effect, then

the aggreate -demand curve shifts to the right by more than 16 billion

Which of the following is not a reason why the aggregate- demand curve slopes downward?

the classical dichotomy/monetary neutrality effects