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Economics
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21 Oct 2020

Which of the following would cause neither the LRAS nor SRAS to shift?

    1. Decrease in nominal wages

    2. Stronger unionization of labor force

    3. Increased productivity of labor and capital

    4. Decrease in investment

  1. Which of the following would not cause neither the LRAS or SRAS to shift?

    1. A decrease in investment will not shift the SRAS curve nor the LRAS curve, since these curves are affected only by supply shocks which are usually connected on input prices. Rather, a decrease in investment would shift the aggregate demand curve.

    1. Decrease in nominal wages

    2. Stronger unionization of labor force

    3. Increased productivity of labor and capital

    4. Decrease in investment

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Macroeconomics
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Aggregate Supply
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Kristelle Balando
Kristelle BalandoLv10
21 Oct 2020
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Related questions

Which of the following would cause the LRAS to shift?

    1. Increase in oil prices

    2. Stronger unionization of labor force

    3. Increased productivity of labor and capital

    4. Natural disasters that adversely affect harvests

Which of the following would cause the SRAS to shift to the right?

    1. Increase in consumption

    2. Decrease in investment

    3. Decrease in nominal wages 

    4. Increase in oil prices

1) If actual (equilibrium ) real GDP is less than the full-employment, or natural, level of real GDP, then wages and other input prices are expected to:

a. fall and SRAS to shift to the left until long-run equilibrium is achieved.

b. fall and SRAS to shift to the right until long-run equilibrium is achieved.

c. rise and SRAS to shift to the left until long-run equilibrium is achieved.

d. rise and SRAS to shift to the right until long-run equilibrium is achieved.

2) In a self-regulating economy, inflationary gaps are automatically eliminated in the long run by:

a. decreases in wage rates that cause short-run aggregate supply to shift rightward.

b. decreases in wage rates that cause short-run aggregate supply to shift leftward.

c. increases in wage rates that cause short-run aggregate supply to shift rightward.

d. increases in wage rates that cause short-run aggregate supply to shift leftward.

3) Assume the economy is initially in equilibrium at the full-employment level of real GDP. If businesses and consumers become pessimistic regarding future economic conditions, ceteris paribus, the aggregate demand curve will shift to the ________, causing the level of output to ______.

a. left; fall

b. right; fall

c. left; rise

d. right; rise

4) Economists that advocate a macroeconomic policy of laissez-faire:

a. believe the economy is self-regulating only if the government intervenes to move the economy to equilibrium at natural real GDP.

b. believe the economy is self-regulating and will automatically move to equilibrium at natural real GDP in the long run.

c. also advocate central planning and government control of resources.

d. also advocate active government intervention in the economy.

5) Which of the following summarizes the process for closing a recessionary gap if the economy is self-regulating?

a. Labor shortages put upward pressure on wages, which leads to higher costs of production and a decrease in short-run aggregate supply.

b. Labor shortages put downward pressure on wages, which leads to increases in employment and spending and an increase in aggregate demand.

c. Unemployed resources put upward pressure on the price level, which leads to higher wages, increases in spending, and increases in aggregate demand.

d. Unemployed resources put downward pressure on the price level, which leads to lower costs of production and an increase in short-run aggregate supply.

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