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Social Science Clinic => Economics => Topic started by: RODY.ELKHALIL on Apr 19, 2019

Title: If aggregate supply decreases and aggregate demand remains unchanged
Post by: RODY.ELKHALIL on Apr 19, 2019

Question 1

If inflation expectations change, a contractionary fiscal policy causes

◦ the long-run Phillips curve to shift.
◦ the short-run Phillips curve to shift.
◦ the short-run Phillips curve to remain constant.
◦ a movement along the short-run Phillips curve.

Question 2

If aggregate supply decreases and aggregate demand remains unchanged

◦ there will be a positive relationship between the price level and the level of aggregate output.
◦ there will be a negative relationship between the price level and the level of aggregate output.
◦ there will be no systematic relationship between the price level and the level of aggregate output.
◦ the price level will remain unchanged, but aggregate output will decrease.

Title: If aggregate supply decreases and aggregate demand remains unchanged
Post by: macagnavarro on Apr 19, 2019

Answer 1

the short-run Phillips curve to shift.

Answer 2

there will be a negative relationship between the price level and the level of aggregate output.

Title: If aggregate supply decreases and aggregate demand remains unchanged
Post by: RODY.ELKHALIL on Apr 19, 2019

Thanks

Title: If aggregate supply decreases and aggregate demand remains unchanged
Post by: macagnavarro on Apr 19, 2019

Welcome :)