An improvement in technology would shift which of the following curves?
Answer(s): B
Improvements in technology permit the economy to squeeze a larger output from a specific resource supply.Thus, such improvements enhance productivity and thereby shift the LRAS curve to the right.Before such technology shifts the long run aggregate supply however, the short run aggregate supply is affected. Thus, both the SRAS and LRAS curves shift outward under a technology improvement.
Which of the following determine(s) the supply curve?
Answer(s): D
Note that the total money supply in the economy determines the values plotted on the price-axis of a supply curve.
Under a monetary expansion, aggregate demand can be expected to ________.
Under a monetary expansion, individuals posses more money balances. Since they invest/save more and consume more, aggregate demand increases due to increased consumption.
If you were asked to study the economy over the past five years, you would use the real GDP series rather than the nominal GDP series because
Answer(s): C
It is almost always true that economists are interested in real changes rather than nominal changes because nominal changes look at both changes in the amount of goods and services produced and prices. Real changes focus only on changes in the amount of goods and services produced.
If the Fed wanted a more expansionary monetary policy, which of the following would be most appropriate?
To expand the money supply the Fed may buy government bonds from the public. This action injects money into the economy because individuals who formerly held U.S. security notes now hold money balances.
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