Question

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

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Answer #1

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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