Question

poten may Ft et the nepastive inpact on agsregate demand of a alling oney supply A) By decressing mo B) By inereasing C) By reducing tax tax D) By increasing ta E) By imposing tarift on innpon 13. What is the main argumet of the ecosomists who want governmwest imervention during recession a. Market can never fix the problem h Nominal wage is dow nward rigid and it will take long time for market to fix u. c. Market will increase d Market can't change aggregate supply e Market can't change aggregate demand 14. Suppose an economy has been hit by negative demand shock and has fallen belowthr long-run trend is re e sion). No? r tries to bring the economy back to the long-run trend by policy interveation, the Real GDP will be back to the pre-recession long-rwn trend level but price will bepre-recession price level (Use AS-AD diagram) a more than b. less tha c equal to 15. When the macroeconomic equilibrium is such that real GDP is less than potential (long-run) real GDP, the economy is suffering trom and the government policy to eliminate this gap willreal GDP and to the price level. (Use AS-AD diagsm B) an infiationary gap; increase: decrease y gap; increase; increase Di an inflationary gap; decrease; increase

Answer 1

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