1. The short-run aggregate supply curve shows how ________ cause output to rise.
A. increases in inflation
B. decreases in unemployment
C. decreases in nominal interest rates
D. All of these
E. None of these
2.If the adoption of a new technology led to gains in productivity ________.
A. the ensuing positive supply shock would lead to an immediate increase in output
B. in the short-run, the ensuing increase in supply would lower inflation
C. and if this new technology permanently altered the productive capacity of the economy then the increase in output and decrease in inflation would be permanent as well
D. All of these
E. None of these
3.An autonomous increase in net exports for any given inflation rate ________.
A. would add directly to planned expenditures
B. would raise the equilibrium level of output
C. the aggregate demand curve would shift to the right
D. All of these
E. None of these
4.In the 1960s and 1970s, research funding by the U.S. government and some universities led to revolutionary advances in network computing. These advances in communication and network technology remained largely isolated to governmental and academic use. By the mid-to-late 1990s, the Internet began to be widely adopted with massive increases in productivity (which journalists dubbed the "new economy"). Which of the following is an appropriate description of the mechanism behind this supply shock?
A. Since this "new economy" was a new paradigm, the transition from a pre-internet to an internet economy was initially costly. Thus, the AS curve likely shifted to the left and unemployment likely increased in the short-run
B. The ensuing increase in productive capacity led to the rightward shift of the LRAS which is a likely explanation for the protracted decline in the unemployment rate of the 1990s
C. A negative output gap would have resulted in the short-run, but it was eventually closed by a rightward shift of the LRAS which is a likely explanation for the protracted decline in the inflation rate of the 1990s
D. All of these
E. None of these
5.The March 2000 "tech bubble" burst caused the aggregate demand curve to shift to the left by ________.
A. causing an upward spike in the real interest rate
B. reducing autonomous spending by households and businesses
C. reducing government spending on high-tech equipment
D. All of these
E. None of these