Chapter 30

Question 0

What policies would advocate the active approach to closing and expansionary gap?

Answer 0

A decrease in government spending an increase in taxes and a decrease in the money supply

Question 1

What does the long run aggregate supply curve look like at the output level equal to potential outcome?

Answer 1

The long run aggregate supply curve is vertical line

Question 2

An argument in favor of discretionary monetary policy would be

Answer 2

Discretionary monetary policy may help avoid prolonged unemployment and why does swings in the economy resulting from a decrease in aggregate demand

Question 3

Which would cause a shift of the short run Phillips curve

Answer 3

A decrease in short run aggregate supply and a decrease in the expected inflation rate