Which of the following events will not cause an increase in the aggregate price level?

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Which of the following will not cause an increase in the natural rate of unemployment?
When the price level increases which of the following occurs?
Which of the following does not shift the aggregate supply curve?
Which of the following would cause the short run aggregate supply curve to shift upward and to the left?

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Terms in this set (30)

The neutrality of money is consistent with which of the following statements?

changes in the money supply will not affect employment in the short run.
changes in the money supply will not affect the price level in the short run
changes in the money supply will not affect employment in the medium.
changes in the money supply will not affect the price level in the medium run

Assume the economy is initially operating at the natural level of output. Now suppose a budget is passed that calls for an increase in government spending. This increase in government spending will, in the medium run, have NO effect on which of the following?

the interest rate
employment
the price level
all of the above
none of the above

Assume the economy is initially operating at the natural level of output. Which of the following events will NOT change the composition of output (i.e., the percentage of GDP composed of consumption, investment, ... etc.) in the medium run?

an increase in consumer confidence
an increase in the money supply
a reduction in government spending
a cut in taxes
a reduction in the desire to save

Based on the aggregate supply relation, an increase in current output will cause

an increase in the markup over labor costs.
a shift of the aggregate supply curve.
an increase in the current price level.
a change in the expected price level this year.
an increase in the expected price level and an upward shift of the AS curve.

The aggregate demand (AD) curve presented in the textbook has its particular shape because of which of the following explanations?

as P decreases in a closed economy, goods and services become relatively cheaper and individuals respond by increasing the quantity demanded of goods and services.
an increase in the money supply (M) will cause a reduction in the interest rate, an increase in investment, and an increase in output .
an increase in the aggregate price level (P) will cause an increase in the interest rate and a reduction in output.
an increase in P will cause a reduction in the real wage, an increase in employment, and an increase in output.

The short-run aggregate supply curve (AS) presented in the textbook has its particular shape because of which of the following explanations?

a reduction in the aggregate price level will cause a reduction in the interest rate and an increase in output.
a drop in the nominal wage causes an increase in the amount of output that firms are willing to produce.
a reduction in output causes a reduction in employment, an increase in unemployment, a reduction in the nominal wage and a reduction in the price level.
an increase in the aggregate price level causes an increase in nominal money demand and an increase in the interest rate.

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Which of the following will not cause an increase in the natural rate of unemployment?

Which of the following will NOT cause an increase in the natural rate of unemployment? overly expansionary monetary and fiscal policy. (Correct!)a lower inflation rate than necessary.

When the price level increases which of the following occurs?

Price levels are leading indicators in the economy; rising prices indicate higher demand leading to inflation while declining prices indicate lower demand or deflation.

Which of the following does not shift the aggregate supply curve?

A change in price will create a movement along the supply curve, known as a change in quantity supplied, but will not cause a shift in the supply curve. Non-price changes cause changes in supply. As a result, a rise in the price level will change the quantity delivered rather than shift the supply curve.

Which of the following would cause the short run aggregate supply curve to shift upward and to the left?

Increases in the price of such inputs cause the SRAS curve to shift to the left, which means that at each given price level for outputs, a higher price for inputs will discourage production because it will reduce the possibilities for earning profits.