If British incomes rose, this would be reflected in the short-run model as a shift in...
If British incomes rose, this would be reflected in the short-run model as a shift in the U.S. AS to the right.
True
False
An increase in the inflation target would shift the AD to the left.
True
False
The Keynesian school assumes that aggregate supply is plentiful and thus passive in their model.
True
False
The classical school assumes that since wants and desires are unlimited, aggregate demand is plentiful and thus passive.
True
False
Homework Answers
a) True
as it will increase the demand for the US exports and shift the AD curve in the US to the right.
b) false
it will lead to a higher inflation i.e. an expansionary policy and that will shift the AD curve to the right.
c) true
it mainly depends in the demand = higher the demand the higher the supply will be.
d) true
they have all the focus in the supply of the goods in the market.
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