Y₂ Real GDP AD, AD₂ The graph above refers to a significant increase in individual income taxes, taking them to their highest level in 50 years. Which of the following is likely to result? a) cyclical unemployment will decrease b) inflationary pressures will be mild c) the economy will experience lower economic growth d) macroeconomic supply will decrease in the short run

If the government increases its expenditure on goods and services and as a​ result, the money wage rate​ increases, the economy has experienced​ _______.

Is the equilibrium at full employment, inflation or recession? Price level Aggregate Demand Aggregate Potential GDP Supply 50 $700 $100 100 $600 $200 150 $450 $450 200 $300 $480 250 $220 $500 300 $150 $510 $510 350 $100 $512

Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend despite the cycles?

What is inflationary gap? Select one: When aggregate expenditures are greater than the full employment level causing a demand pull-inflation When aggregate expenditures are greater than full employment level causing cost push inflation None of the options are correct It is the gap between a developed nation GDP and an under-developed/ developing nation GDP When aggregate expenditures are inadequate to bring about a full employment level

The trough of the business cycle: O is a temporary maximum level of real GDP. comes before the recession phase. comes right after the expansion phase. is a temporary minimum level of real GDP.

Which of the following would constitute a supply-side economic policy for raising employment? a) decreasing social security benefitsb) decreasing the money supplyc) increasing corporate and personal taxationd) increasing government spending aimed at exploiting the multiplier effect

High rates of​ inflation, which lowers the unemployment rate consistent with the short run​ Phillip’s Curve, also drives or determines a​ nation’s long-run level of real​ GDP?   True   False

The graph above refers to a significant increase in individual income taxes, taking them to their highest level in 50 years. Which of the following is likely to result? a) macroeconomic supply will decrease in the short run b) the economy will experience lower economic growth c) inflationary pressures will be mild d) cyclical unemployment will decrease

Using the “Keynesian” labor market and the aggregate production function, explain what happens to the amount of output firms are willing to produce … If there is an increase in the price level. If there is a decrease in the price level.