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Everything else held constant, an increase in the cost of production ____ aggregate
____.
A) increases; demand
B) decreases; demand
C) increases; supply
D) decreases; supply
Answer: D
Diff: 2 Type: MC Page Ref: 578
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, a decrease in the cost of production ____ aggregate
____.
A) increases; demand
B) decreases; demand
C) increases; supply
D) decreases; supply
Answer: C
Diff: 2 Type: MC Page Ref: 578
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, when output is ____ the natural rate level, wages will
begin to ____, increasing short-run aggregate supply.
A) above; fall
B) above; rise
C) below; fall
D) below; rise
Answer: C
Diff: 2 Type: MC Page Ref: 577 - 578
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, when output is ____ the natural rate level, wages will
begin to ____, decreasing short-run aggregate supply.
A) above; fall
B) above; rise
C) below; fall
D) below; rise
Answer: B
Diff: 2 Type: MC Page Ref: 577 - 578
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate