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Everything else held constant, when actual output exceeds the natural rate of output
____ aggregate supply ____.
A) short-run; decreases
B) short-run; increases
C) long-run; increases
D) long-run; decreases
Answer: A
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
If workers demand and receive higher real wages, the cost of production ____ and the
short-run aggregate supply curve shifts ____.
A) rises; leftward
B) rises; rightward
C) falls; leftward
D) falls; rightward
Answer: A
Diff: 2 Type: MC Page Ref: 580
Skill: Applied
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, if workers expect an increase in the price level, ____
aggregate supply ____.
A) long-run; increases
B) long-run; decreases
C) short-run; decreases
D) short-run; increases
Answer: C
Diff: 2 Type: MC Page Ref: 580
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate