5. In addition to the response of the Reserve Bank to inflation, the aggregate demand curve could be

5. In addition to the response of the Reserve Bank to inflation, the aggregate demand curve could be downward sloping because: Household purchasing power rises with inflation. The real value of fixed income payments fall with inflation. Lower rates of inflation generate more uncertainty for business a. b. c. d. The price of domestic goods and services sold overseas decreases with inflation. Everything else being equal, an exogenous increase in consumption spending due to 6. improved consumer sentiment would a. Shift the aggregate demand curve to the left. b. Shift the aggregate demand curve to the right. c. Leave the position of the aggregate demand curve unchanged but lead to a downward movement along the curve. Leave the position of the aggregate demand curve unchanged but lead to an d. upward movement allong the curve. 7. Inflation changes slowly because: Expectations of inflation can become self-perpetuating Wage contracts sometimes involve cost-of-living adjustments Expectations of inflation depend only on a random error term The unemployment rate moves up and down in recessions and expansions a. b. d. 8. Everything else being equal, in the aggregate demand-aggregate supply model, a large drop in oil prices will initially: a. Raise inflation and raise output b. Raise inflation and lower output Lower inflation and raise output d. Lower inflation and lower output c. Assume an economy is initially at the full employment equilibrium level of output in 9. the aggregate demand – aggregate supply model. Everything else being equal, a cut in marginal tax rates from very high levels could: Temporarily raise output and have no effect on inflation Permanently lower output and have no effect on inflation Permanently raise output and have an ambiguous effect on inflation Temporarily lower output and have an ambiguous effect on inflation a. b. c. d.

 

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code “Newclient” for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.

The post 5. In addition to the response of the Reserve Bank to inflation, the aggregate demand curve could be appeared first on Affordable Nursing Writers.