Question Details

A period of rising prices along with rising unemployment is the normal aftermath of a period 


1. If the aggregate supply curve is relatively flat, but not completely flat, 
a) "the" multiplier when expressed in real terms should be a bigger number than when expressed in nominal terms; 
b) "the" multiplier when expressed in real terms should be a smaller number than when expressed in nominal terms; 
c) "the" multiplier when expressed in real terms should be exactly the same number as when it is expressed in nominal terms 
d) there is not enough information given to determine the relative sizes of the real and nominal multipliers 
2. If the economy experiences a negative supply-side shock and the government counters with a stimulating fiscal policy, the only result we can be sure of is 
a) a lower price level b) a higher price level 
c) a lower level of output d) a higher level of output 
3. An important ingredient in the debate over supply-side economics is that 
a) the cost of supplying goods and services is rising 
b) programs that increase production often increase economic inequality 
c) economic theory can give no guidance to policy-makers about the effects of an untried policy 
d) the gap between "winners" and "losers" must be narrowed if society is to provide incentives for success 
4. The aggregate supply curve will shift up for all the following except 
a) an increase in wage rates b) a decrease in productivity 
c) an increase in the price level d) an increase in the price of raw materials 
5. A period of rising prices along with rising unemployment is the normal aftermath of a period of 
a) excessive aggregate supply b) deficient aggregate demand 
c) excessive aggregate demand d) a rapidly rightward-shifting aggregate supply curve


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