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Question 17 6 pts For an economy to be self-regulating: policymakers must be able to control the position of the aggregate de
Question 13 6 pts The short-run aggregate supply curve would be expected to increase (shift to the right) as a result of: an
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17. For an economy to be self regulating wages and other input prices must be flexible. To eliminate a recessionary gap, in a self regulating economy, wages must fall that will clear the labor market surplus. This will shift the SRAS curve rightward to the potential GDP level.

Answer: option D

13. An increase in technology improves productivity, that shifts the LRAS curve rightward. A decrease in product price decreases cost of production, thereby increasing the SRAS.

Answer: Option B

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