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ECON_CH28.pdf

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Department
Administrative Studies
Course
ADMS 1010
Professor
All Professors
Semester
Winter

Description
University of LethbridgeDepartment of EconomicsECON 1012Introduction to MicroeconomicsInstructorMichael G LanyiChapter 28Canadian UE InflB C1Which of the following would cause the aggregate demand curve to keep shifting rightward year after yearAA onetime tax cutBA onetime increase in government expenditures on goods and servicesCA persistent increase in the quantity of moneyDInflationEExcess wage demandsTopicInflation Cycles2At full employment an increase in the quantity of money ceteris paribus can create aAcostpush inflation as can an increase in government expenditureBdemandpull inflation as can an increase in government expenditureCdemandpull and a costpush inflation as can an increase in government expenditureDcostpush inflation but an increase in government expenditure cannotEdemandpull inflation but an increase in government expenditure cannotTopicInflation Cycles3Demandpull inflation occurs whenAaggregate demand increasesBunemployment is above the natural rateCinput costs riseDpeople incorrectly forecast inflationEaggregate supply decreasesTopicInflation Cycles4Inflation resulting from an increase in aggregate demand is calledAcostpush inflationBpolitical inflationCdemandpull inflationDanticipated inflationEunanticipated inflationTopicInflation Cycles5Which one of the following can create ademandpull inflationAA cut in the interest rateBA decrease in government expenditure on goods and servicesCA decrease in investment as a result of a decrease in expected future profitsDHigher wages negotiated by unionsEA sharp increase in the price of oilTopicInflation Cycles16Stagflation occurs when the economy experiences bothAfalling inflation and increasing real GDPBfalling inflation and decreasing real GDPCrising inflation and increasing real GDPDlow exports and low importsErising inflation and decreasing real GDPTopicInflation Cycles7Suppose the economy is in longrun equilibrium when the price of oil rises Which one of the following is not a shortruneffect of this situationAan increase in the price levelBan increase in unemploymentCa decrease in real GDPDan increase in real GDP above longrun real GDPEa decrease in consumer spendingTopicInflation Cycles8Suppose OPEC unexpectedly collapses which leads to a fall in the price of oilAs a result the price levelAfalls and real GDP increasesBfalls and real GDP decreasesCrises and real GDP decreasesDrises and real GDP remains the sameErises and real GDP increasesTopicInflation Cycles9An increase in the price level due to an increase in the price of oilAleads to an increase in the money wage rateBcreates stagflation in the shortrun and will trigger a costpush inflationCincreases output above potential GDPDleads to a decrease in the money wage rateEcreates stagflation in the shortrun and may trigger off a costpush inflationTopicInflation Cycles10Costpush inflation can result from an initialAincrease in the money wage rateBincrease in government expenditureCincrease in personal income taxesDdecrease in personal income taxesEincrease in transfer paymentsTopicInflation Cycles11Stagflation can result fromAa rightward shift of the demand curveBa rightward shift of the longrun aggregate supply curveCa rightward shift of the shortrun aggregate supply curveDa leftward shift of the demand curveEa leftward shift of the shortrun aggregate supply curveTopicInflation Cycles2
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