the economics of money, banking, and financial markets

748 $

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11. 
    

    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

    
    


12. 
    

    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

    
    


13. 
    

    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

    
    


14. 
    

    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