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1. Which of the following causes the SRAS curve to shift left? A. A decrease in...

1. Which of the following causes the SRAS curve to shift left?

A. A decrease in the money supply

b. An increase in the Marginal Propensity to Consume

c. An increase in the price of oil

d. An increase in the amount of human capital

e. A decrease in the actual price level

2. Suppose the economy is in its long run equilibrium. If there is a decrease in consumption, what happens in the short run?

a. Price level rises and output rises

b. Price level falls and output rises

c. Price level rises and output falls

d. Price level falls and output falls

e. Not enough information

3. From the previous question, what happens in the long run (relative to the initial equilibrium)?

Price level falls and output is unchanged

Price level rises and output is unchanged

Price level rises and output falls

Price level falls and output falls

Not enough information

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Answer #1

1. c. An increase in the price of oil

2. d. Price level falls and output falls

3. a. Price level falls and output is unchanged

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