(05.06 MC) With the advancement in technology and an increase in labor productivity, the output of an economy increases. How is this phenomenon analogous to the outward shift of the long-run aggregate supply curve?

(04.05 MC) The central bank decides to increase the money supply by $500 million in the economy by decreasing the discount rate to 4%. Which of the following is true about the nominal interest rate in the economy?

(05.02 MC) Use the graph to answer the question that follows.In the accompanying graph, the long-run Phillips curve has shifted from LR to LR′. Which of the following could explain this shift?

(05.06 LC) How is economic growth best described or summarized?

(03.02 MC) If the marginal propensity to consume is .75 (or 75%), which of the following is true?

(03.07 MC) An economy in long-run equilibrium experiences a significant negative supply shock. If the government takes no action to address this, what would occur in the short run?

(01.01–01.03, 05.06 HC) Assume that Athens and the Sparta use equal resources to produce consumer and capital goods, as illustrated in the table below showing maximum possible production figures. Country Capital Goods Consumer Goods Athens 70 units 210 units Sparta 50 units 100 units Draw a fully labeled production possibility curve for Athens. Place capital goods on the vertical axis and consumer goods on the horizontal axis. Assume constant opportunity cost. On your graph from part (a), label an inefficient point of production I, an efficient point of production E, and an unattainable point of production U. Which country has the comparative advantage in the production of consumer goods? Explain. If Athens shifted from producing 50 units of capital goods and 60 units of consumer goods to producing 60 units of capital goods and 30 units of consumer goods, what would be the impact on its economic growth in the long run? Based on the data table, what range of capital goods could be traded for 60 units of consumer goods that would be mutually beneficial?

(05.03 MC) Assume that the money supply in an economy is $250 billion, the price level is 1.25, and the average dollar is spent four times in a year. Based on this data, which of the following must be true?

(05.07 MC) Which of the following policies would be most likely to slow real economic growth?

(06.04 HC) Prices in Country A sharply rose due to a supply shortage and led to high levels of inflation in the economy. What effect is this price increase likely to have on domestic currency in the foreign exchange market?