Answers to questions can be found in the answers section.
- Aggregate supply represents the output of
- all foreign-owned firms on US soil.
- all domestic-owned firms on US soil.
- all domestic-owned and foreign-owned firms on foreign soil.
- all domestic-owned and foreign-owned firms on US soil.
- The aggregate supply curve says that an increase in the nation’s price level causes aggregate supply to
- decrease.
- shift leftward.
- shift rightward.
- increase.
- The aggregate supply curve will shift rightward whenever
- costs rise relative to prices.
- costs fall relative to prices.
- costs rise relative to productivity.
- costs fall relative to productivity.
- Which of the following events might cause the aggregate supply curve to shift leftward?
- energy prices decline
- government introduces a higher tariff on imported steel
- minimum wage declines
- R&D spending leads to large gains in manufacturing productivity
- Which of the following would not be a supply-side policy tool?
- reduction in marginal income tax rates
- subsidy to firms who buy new capital
- decrease in the money supply
- deregulation of broadcast firms
- Supply-side policy would be useful for which of these situations?
- after a decrease in the price of oil
- union bargaining strength declines
- forecasts predict an economic slowdown and lower inflation
- forecasters predict an economic slowdown and higher inflation
- Supply-side policy would be useful for which of these situations?
- after a rise in the price of oil
- after a large increase in wage costs
- after a period of rising interest rates
- All of the above