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# Macroeconomics Study Set 44

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## Quiz 24 : From the Short Run to the Long Run: the Adjustment of Factor Prices

Which of the following would occur as part of the automatic adjustment process in an economy with a recessionary gap?
Free
Multiple Choice

E

Consider an AD/AS model in long- run equilibrium. An output gap, caused by a leftward shift of the AD curve, would be eliminated if
Free
Multiple Choice

A

The Phillips curve describes the relationship between
Free
Multiple Choice

C

Consider the AD/AS model and suppose the economy begins at potential output. The effect of a negative AS shock on real GDP will be reversed in the long run with a shift in .
Multiple Choice
Consider the basic AD/AS macro model in long- run equilibrium. An expansionary AD shock will the price level and output in the short run. In the long run, the price level will And output .
Multiple Choice
What economists sometimes call the "long- run aggregate supply curve" is
Multiple Choice
In the long run in the AD/AS macro model we can say that
Multiple Choice
If the economy is experiencing an inflationary output gap, the adjustment process operates as follows:
Multiple Choice
Consider the basic AD/AS macro model in long- run equilibrium. An expansionary AD shock would have _ output effect in the short run and _ output effect in the long run.
Multiple Choice
Consider the AD/AS model, and suppose that the economy begins at potential output. The effect of a positive AS shock on real GDP will be reversed in the long run with a shift in .
Multiple Choice
An inflationary output gap is characterized by
Multiple Choice
Automatic fiscal stabilizers the impact of demand or supply shocks on the economy since government's net tax revenues during booms and during recessions.
Multiple Choice
Consider the AD/AS model. Since output in the long run is determined by Y*, the only role of the AD curve is to determine the price level. This is true because the
Multiple Choice
If the economy in the short run is experiencing a recessionary gap, we are likely to see
Multiple Choice
As the macro economy adjusts from the short run to the long run,
Multiple Choice
If the short- run macroeconomic equilibrium occurs with real GDP less than Y*, the economy is
Multiple Choice