Long-run aggregate supply is the level of output given by a. price stickiness b. aggregate demand c. potential output d. monetary policy

classical economists a. argued that money supply determined aggregate demand  b. believed that the quantity of money influences interest rates and real wages c. regarded monetary policy as unimportant since quantity of money does not determine price level. d. that prices would increase more than proportionate to an increase in money supply

Read the news clip, then answer the following questions. inflation when it discusses The news clip refers to rising production costs. "Rising labour productivity" can neutralize the effect on the inflation rate of "higher input costs" because A. cost-push; it increases short-run aggregate supply and long-run aggregate supply with no slowdown in aggregate demand growth OB. demand-pull; it increases aggregate demand OC. demand-pull; it increases short-run aggregate supply D. cost-push; it increases aggregate demand by more than it increases short-run aggregate supply Tight Money Won't Slay Food, Energy Inflation It's important to differentiate between a general increase in prices a situation in which aggregate demand exceeds their aggregate supply and a relative price shock. For example, a specific shock to energy prices can become generalized if producers are able to pass on the higher costs. So far, global competition has made that difficult for companies, while higher input costs have…

Question 7. Suppose there is an exogenous increase in the price of oil in an economy. a. Use the aggregate demand and supply model to illustrate and examine the impact of the oil-price increase on output, employment and the price level in both the short run and the long run. b. If the Bank of Canada cares about keeping output and employment at their natural-rate levels, what is the policy response of the Bank of Canada? What is the impact of policy response on the price level? Use the aggregate demand and supply model to explain your answer. Please illustrate the answers using figures with aggregate demand and supply curves. Please also briefly explain the answers in words.