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- When the aggregate supply schedule is positively sloped, continous increases in the nominal money supply, ceteris paribus, result in
- No change in the price level and proportional increases in real output
- No change in real output and proportional increases in the price level
- An increase in the price level and real output
- An increase in the price level and a decrease in real output
- The Phillips curve shows
- An inverse relationship between the real and nominal wage
- An inverse relationship between the rate of inflation and the rate of unemployment
- A positive relationship between the nominal wage and the rate of unemployment
- A positive relationship between the rate of inflation and the nominal wage
- The dynamic aggregate demand schedule shifts rightward when there is an increase in
- The expected rate of inflation, ceteris paribus
- The growth rate of the nominal money supply, ceteris paribus
- The income tax rate, ceteris paribus
- The inflatin rate, ceteris paribus
- The equation for dynamic aggregate demand is \(y = {y_{ - 1}} + \beta \left( {M - \pi } \right) + \alpha f\) Dynamic aggregate demand shifts to the
- Right when \({y_{ - 1}}\) increases, ceteris paribus
- Right when \(\pi \) increases, ceteris paribus
- Right when \(\mathop M\limits^ \cdot \) decreases, ceteris paribus
- Left when \(\pi \) decreases, ceteris paribus
- Dynamic aggregate supply is
- Positively sloped when \({\pi ^e} = f\left( {{\pi _{ - 1}}} \right)\)
- Positively sloped when \(gW = f\left( \pi \right)\)
- Vertical when \(gW = f\left( {{\pi _{ - 1}}} \right)\)
- Vertical when \(gW = f\left( {{\pi ^e}} \right)\)
- The equation for dynamic aggregate supply is \(\pi = {\pi ^e} + \lambda \left( {y - {y_e}} \right).\) Dynamic aggregate supply shifts leftward, when
- There is an increase in y, ceteris paribus
- There is an increase in \({\pi ^e},\) ceteris paribus
- There is an increase in \(\pi ,\) ceteris paribus
- There is a decrease in \(\lambda ,\) ceteris paribus
- An economy is in inflationary equilibrium. An increase in the groth rate of the nominal money supply shifts
- DAD rightward, establishing equilibrium at a higher rate of inflation and level of output
- DAD and DAS rightward, establishing equilibrium at a higher rate of inflation and level of output
- DAD and DAS leftward with a new equilibrium established at a future period at a higher rate of inflation and level of output
- DAD to the right and DAS to the left with a new equilibrium established at a future period at a higher rate of inflation and no change in output
- An economy is in inflationary equilibrium. A sustained increase in government spending shifts
- DAD rightward for one period
- DAD rightward permanently
- DAD and DAS rightward permanently
- DAD rightward, and a new equilibrium is established after successive periods at a higher rate of inflation
- Disinflationary demand-management policies:
- Achieve a lower rate of inflation without causing a decrease in output
- Reduce output but have no initial effect on the inflation rate
- Require an increase in government spending
- Require a reduction in the growth rate of the nominal money supply
- The economy is in inflationary equilibrium. A reduction in
- Government spending permanently lowers the economy's rate of inflation
- Nominal money supply growth lowers the inflation rate with no effect on output in the short run
- Nominal money supply growth lowers the inflation rate and the level of output in the short run
- Government spending lowers the rate of inflation with no effect on output in the short run

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