A. An increase in the available capital

B. An increase in the available labour

C. All of these answers shift the long-run aggregate supply curve

B. Price rise; output fall

C. Price fall; output falls

D. Price fall; output rises

A. Output and the price level are unchanged from their initial values

B. Output falls; prices are unchanged from the initial value

C. Price fall; output is unchanged from its initial value

A. Price fall; output falls

B. Price rise; output rises

D. Price fall; output rises

A. fail to respond to the adverse supply shock and allow the economy to adjust on its own.

B. respond to the adverse supply shock by decreasing aggregate demand which lower prices

D. respond to the adverse supply shock by decreasing short run aggregate supply

A. When the economy is at the natural rate of aggregate demand

B. When there is no no unemployment

C. When the economy is at the natural rate of investment

A. falling prices and falling output

B. falling prices and rising output

D. rising prices and rising output

A. Prices to rise and output to rise

C. Price to fall and output to remain unchanged

D. Prices to fall and output to fall

B. lower prices increase money holding decrease lending, interest rates rise and investment spending falls

C. lower prices reduce money holding increase lending, interest rates fall and investment spending increase

D. lower prices decrease the value of money holding and consumers spending decrease

A. People will raise their price expectations and the short run aggregate supply will shift left

B. People will reduce their price expectations and aggregate demand will shift right

D. People will raise their price expectations and aggregate demand will shift left

A. a decrease in the money supply

B. an increase in government spending on military equipment

D. an increase in price expectations

E. None of these answers

A. Shift aggregate demand to the left

B. Shift short run aggregate supply to the left

C. shift short-run aggregate supply to the right

A. classical dichotomy theory of the short run aggregate supply curve

B. sticky price theory of the short run aggregate supply curve

D. sticky wage theory of the short run aggregate supply curve

B. Output falls; prices are unchanged from the initial value

C. Output rises; prices are unchanged from the initial value

D. Prices fall; output is unchanged from its initial value

B. sticky-price theory of the short run aggregate supply curve

C. classical dichotomy theory of the short-run aggregate supply curve

D. misperceptions theory of the short-run aggregate supply curve

B. The interest-rate effect

C. The wealth effect

D. The exchange-rate effect

B. shift the short-run aggregate supply curve to the right

C. shift the aggregate demand curve to the left

D. shift the short-run aggregate supply curve to the left

A. shifts right when the government raises the minimum wage

C. shifts left when the natural rate of unemployment falls

D. is positively sloped because price expectations and wages tend to be fixed is the long run

A. None of these answers

B. A recession is when output rises above the natural rate of output

D. A depression is a mild recession

A. lower prices increase the value of money holding and consumer spending increases

C. lower prices decrease the value of money holdings and consumers spending decreases

D. lower prices increase money holdings decrease lending interest rates rise, and investment spending falls