Question 1
If wages adjust fully to price increases in the long run, the full effect of fiscal policy is on
◦ output.
◦ the price level.
◦ both output and the price level.
◦ neither output nor the price level.
Question 2
When aggregate supply is vertical, economic policies concerning output are
◦ largely effective.
◦ marginally effective.
◦ ineffective.
◦ completely effective.