Ch 17 AS

What shape is the LRAS curve?

• Vertical

• Horizontal

• upward sloping

• downward sloping

What shape is the SRAS curve?

• Vertical

• Horizontal

• upward sloping

• downward sloping

The neoclassical AS curve is always perfectly _____ at the ____ level of output

• Elastic/ Full employment

• Inelastic/ Full employment

• Elastic/ socially optimal

• Inelastic/socially optimal

Which is NOT a factor that will cause a shift in LRAS curve?

• better infrastructure

• better tech

• better factor resources

• lower general price level

When infrastructure is improved, what will happne to the LRAS curve?

• movement to the right

• movement to the left

• shift to the right

• shift to the left

Which is NOT a reason for "sticky" wages in the short run?

• Labor contracts

• workers will accept wage cuts rather than layoffs

• minimum wage legislation

• labor unions

As an economy reaches its productive capacity, what happens to the general price level?

• it rises

• it falls

• it stays constant

• necessity prices rise and luxury prices fall

What is the likely effect of a reduction in govt subsidies on the SRAS curve?

• shift outward

• movement upward

• shift inward

• movement inward

What is the likely effect of an increase in taxes on the SRAS curve?

• shift outward

• movement upward

• shift inward

• movement inward

Which of the following does NOT cause a shift of the SRAS curve?

• Changes in commodity prices

• changes in labor costs

• reforms in education

• higher taxes