Another 10 from chapter 8 #6

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If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium

output would necessarily rise

An increase in input productivity will

reduce the equilibrium price level, assuming downward flexible prices

A rightward shift of the AD curve in the very steep upper part of the of the short run AS curve will

Increase the price level by more than real output

Graphically full employment, low-inflation, rapid-growth, economy of the last half of the 1990's depicted by a

Rightward shift of the aggregate demand curve and a rightward shift of the aggregate supply curve

If the dollar price of a foreign currencies fall we would expect

aggregate demand to decrease and aggregate supply to increase

Given a fixed up sloping AS curve, a rightward shift of the AD curve will

increase both the price level and real output

A rightward shift of teh AD curve in the very flat part of the short run AS curve will

increase real output by more than the price level

A decrease in aggregate demand will cause a greater decline in real output the

less flexible is the economy's price lvel

If aggregate demand decreases, and as a result, real output and employment decline but the price level remains unchanged, it is most likely that

the price level is inflexible downward and a recession has occured

If aggregate demand increases and aggregate supply decrease, the price level

will increase, but real output may increase, decrease, or remain unchanged


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