Question

15.	The short-run aggregate supply curve will shift to the:
		right if commodity prices increase. left if productivity increases. left if nominal wages increase. right if government spending increases.

35.	An expansionary fiscal policy either _____ government spending or _____ taxes.
		decreases; increases decreases; decreases increases; decreases increases; increases

12.	The short run in macroeconomic analysis is a period:
		in which many production costs can be taken as fixed. in which interest rates are fixed. of two months, and the long run is more than 12 months. in which wages become fully flexible.

33.	Figure: Inflationary and Recessionary Gaps Reference: Ref 13-4 (Figure: Inflationary and Recessionary Gaps) Look at the figure Inflationary and Recessionary Gaps. A movement from AD3 to AD1 could be caused by:
		lower tax rates. increased government transfers. higher tax rates. increased government purchases.

Answer 1

a) "C"

It will shift to the left as the price of production has risen due to an increase in the nominal wages.

b) "C"

An expansionary fiscal policy either increase the government spending or decrease taxes.

c) "A"

It is the time period when the production cost can be taken as fixed.

d) "C"

A higher tax rate will decrease the disposable income and shift the aggregate demand curve to the left.