True or False:
1. Demand-pull inflation causes the prices of the goods producers sell to rise faster than the costs of the inputs they use in production.
2. As long as AD is increasing more rapidly than LRAS, the economy will tend toward both inflation and economic growth.
3. The economy can never operate beyond its potential output.
4. Short-run real output beyond potential output (and employment beyond full employment) cannot be sustained in the long run.
5. In response to an inflationary gap in the short run, real wages and other real input prices will tend to rise.
6. When an increase in AD causes an inflationary gap in the short run, the only long-run difference from the initial equilibrium is the new, higher price level.
7. A leftward shift in the aggregate supply curve can cause cost-push inflation.
8. The primary culprits responsible for the leftward shift in SRAS in the 1970s were oil price decreases.