. Aggegate supply increases whee A the price level rises B the money wage rate f
ID: 1164286 • Letter: #
Question
. Aggegate supply increases whee A the price level rises B the money wage rate falls C consumption increases D. the money price of ol increases 2. When potential GDP increases, A. aggregate demand increases B, aggregate supply increases C both aggregate demand and aggregate supply incease D, the price level rises 3. The quantity of real GDI demanded increases il A. the buying power of money increases B, the money wage rate rises C. the price level talls D, the nominal interest rate fails 4. An increase in expected future income inceaes A. consumption expenditure, which increases current B. investment, which increases current aggregale supply C the demand for money, which decreases current aggregate demand D. future consumption expenditure and hes no effect on curvent asspegale demand S. Macroeconomic equilibrium occurs when the quantity of inal GOP equals the quantity of A. demanded, real GDP supplied B. demanded; potential GDP C supplied, potential GDP D, demanded: real GDP supplied and potential GDP 6. If the economy is at full employment and the Fed increases the quantity of money- A aggregate demand increases, a recessionary gap appears, and dhe money a zegate supply increases,the price velsarts to tel ndnr begins C aggregate demand increases, an indiationary gap appesrs, and the money wage rate starts to rise D, potential GDP and aggnegate supply increase together and the price level does not change 7. Over the past decade, the demand for goods produced in Chine hes brosght a sustained increase in the demand for China's exports thet has outaripped the growth of supply. As a result, China has experienced a A. period of stable prices and sustained B. rising price level and demand-pull infiation C. rising price level and cost-push inflation D rising price level and & falling real wage radeExplanation / Answer
?Answer:-(1) (B)
?Lower wage rate will reduce wage cost, lowering production cost which will make firms increase production. Aggregate supply will increase.
?(2) (B)
?Potential GDP increases when long-run aggregate supply curve shifts rightward. The same factors that shift LRAS, will shift SRAS curve too, therefore aggregate supply will increase as well.
?(3) (C)
?Price level and quantity of real GDP demanded are inversely related. So, when price level rises (falls), quantity of real GDP demanded falls (rises).
?(4) (A)
?(5) (A)
?Equilibrium occurs at intersection of aggregate demand and aggregate supply curves.
?(6) (C)
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