Another 10 from chapter 8 #6
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