AP Macro Review 4

Which of the following graphs best depicts the Phillips curve model of Te Rehunga based on this AD-AS model?

Assume that the velocity of money in Theopolis is 3 and the aggregate supply curve is vertical at $100 million. What impact will an increase in the money supply have on real output?

Which combination of monetary and fiscal policy would be appropriate to return Mithrim's economy to full employment given a natural unemployment rate of 5% and a current rate of 2%?

In the graph of the Phillips curve above, an economy moved from point 1 to point 2 to point 3. Which of the following would be the most likely reason for the movement from point 2 to point 3 shown in this graph? A change in the natural rate of unemployment, An increase in aggregate demand, A decrease in aggregate demand (AD), A decrease in short-run aggregate supply (SRAS), An increase in short-run aggregate supply (SRAS)

The economy of Rivendell experienced the AD shock shown in this graph. Which of the following combinations of monetary and fiscal policy would be appropriate to combat the effect on the price level shown in this graph? Increase taxes; open market sales, Sell bonds; increase the reserve requirement, Decrease taxes; increase government spending, Decrease taxes; decrease the reserve requirement, Increase taxes; decrease the reserve requirement

This graph shows the trade-offs facing an economy that produces only two goods.

Point ___ is impossible with existing resources and technology.

The short-run aggregate supply curve will shift to the right when: energy prices increase, government regulation increases, prices of inputs decrease, productivity rates decrease

If Mr. Woodward's disposable income increases from $600 to $650 and her level of personal consumption expenditures increase from $480 to $520, you may conclude that her marginal propensity to

In the Keynesian aggregate-expenditure model, if the MPC is 0.75 and gross investment increases by $6 billion, equilibrium GDP will increase by