1. Which of the following would cause the short run aggregate supply curve to sh
ID: 1227849 • Letter: 1
Question
1. Which of the following would cause the short run aggregate supply curve to shift to the right?
A.
an increase in the price level
B.
a technological advance
C.
an increase in interest rates
D.
a decrease in inflation expectations
2. The discount rate is
A.
the interest rate the Fed charges to banks for loans from the Fed.
B.
the interest rate banks charge their best customers.
C.
the interest rate banks charge each other for overnight loans.
D.
the interest rate the U.S. Treasury pays on Treasury Bills.
3.
Contractionary monetary policy causes
A.
aggregate demand to fall and the price level to rise.
B.
aggregate demand to fall and the price level to fall.
C.
aggregate demand to rise and the price level to rise.
D.
aggregate demand to rise and the price level to fall.
Explanation / Answer
(1) (B)
Technological advance lowers the cost of production, which increases aggregate supply in short run.
(2) (A)
It is also called Bank rate.
(3) (B)
Contractionary monetary policy lowers money supply, which lowers aggregate demand and price level.
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