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Increases in output and increases in the inflation rate have been linked toA.discretionary tax policy.B.discretionary government spending.C.higher rates of interest.D.increases in the money supply.

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Suppose that there is a​ temporary, but significant increase in oil prices in an economy with an​ upward-sloping SRAS curve. As a policy response to this​ short-lived but sudden increase in oil​ prices, a central bankA.can stabilize neither the price level nor the real GDP.B.can stabilize both the price level and the real GDP simultaneously.C.cannot stabilize both the price level and the real GDP simultaneously.Your answer is correct.D.has no responsibility to stabilize the real GDP.

A contractionary monetary policy lowers equilibrium real GDP in the short​ run, by increasing the interest rate. In an open​ economy, the net export effectA.has no effect on real GDP since changes in exports and imports cancel each other.B.reinforces the effect of a contractionary monetary policy since the increase in the interest​ rate, increases the value of​ dollar, lowers U.S. imports and causes the real GDP to fall.C.reinforces the effect of a contractionary monetary policy since the increase in the interest​ rate, increases the value of​ dollar, lowers U.S. exports and causes the real GDP to fall.D.weakens the effect of a contractionary monetary policy since the increase in the interest​ rate, increases the value of​ dollar, increases U.S. exports and causes the real GDP to increase.

According to classical​ economists, aggregate demand primarily determinesA.total production in the economy.B.the price level.C.aggregate supply at full employment.D.levels of national output and income.

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