Which of the following supply shocks would shift the aggregate supply curve inward?
a. A decrease in business taxes
b. A decrease in gasoline taxes
c. A decrease in the cost of raw materials
d. A decrease in agricultural output
e. A decrease in the amount and cost of government regulation
Question 2
In an economy in which velocity is constant and real output grows at an average rate of 4 percent per year, a 4 percent average rate of growth in the money supply would result in:
a. a constant price level.
b. a slowly increasing price level.
c. a rapidly increasing price level.
d. constant real GDP.
e. constant nominal GDP.
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