Question 2.

Which event below would cause a rightward shift in the aggregate demand curve?

A, a tax cut

B, a new invention that reduces production costs throughout the economy

C, actions by the Fedto decrease the money supply

D, consumers becoming concerned about the state of the economy

E, none of the above

QUESTION 3

Which of the these statements is false?

A, A cut in income taxex tends to shift the aggregate demand curve rightward.

B, More government spending shifts the aggregate demand curve rightward

C, The long-run aggregate supply curve is vertical.

D, More immigrants coming into a countriy shifts the aggregate supply curve leftward.

QUESTION 4

The long-run aggregate supply curve shifts leftward when

A, the number of machines and buildings increases.

B, persistent droughts turn farm land into unproductive desert.

C, the government removes rules and regulations that makes production more difficult.

D, None of the above is correct.

QUESTION 5

If a country is already at or near it's potential GDP, an increase in aggregate demand leads to:

A, a technical recession and high rates of unemployment

B, an increase in BOTH unemployment AND inflation

C, an increase in inflation

D, in response to greater demand, a large increase in output by suppliers of goods and services