1.A supply-side policy is a policy that: Group of answer choices prevents recessionary gaps that shift the AS curve shif

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1.A supply-side policy is a policy that:
Group of answer choices
prevents recessionary gaps that shift the AS curve
shifts the long-run aggregate supply curve
shifts the short-run aggregate supply curve
shifts the aggregated demand curve
2.
Starting from full employment at the initial target inflation
rate, if there is an adverse inflation shock, then a central bank
must _____ in order to keep inflation from becoming permanently
higher.
Group of answer choices
increase the target inflation rate
maintain the initial target inflation rate
decrease the target inflation rate
shift the short-run aggregate supply curve up
3.
A tax cut that affects both aggregate demand and potential
output is predicted to _____ the long-run equilibrium level of
output, while inflation _____.
Group of answer choices
increase; may increase, decrease or remain unchanged
decrease; decreases
increase; decreases
increase; increases
4.
To prevent inflation from becoming permanently higher following
an adverse inflation shock a central bank must ____, while to
offset the effect of an increase in aggregate demand a central bank
must _____.
Group of answer choices
lower the inflation rate target; adjust the real interest rate
target to the level at which saving equals investment in the long
run
raise the inflation rate target; adjust the real interest rate
target to the level at which saving equals investment in the long
run
maintain the inflation rate target; maintain the real interest
rate target
maintain the inflation rate target; adjust the real interest
rate target to the level at which saving equals investment in the
long run
5.
Exogenous changes in spending refer to changes in planned
spending:
Group of answer choices
unrelated to changes in output and changes in the real interest
rate
related to changes in output and changes in the real interest
rate
related to changes in output
related to changes in the real interest rate
6.
Since increases in inflation reduce planned spending and
short-run equilibrium output:
Group of answer choices
the aggregate supply line is downward sloping
the aggregate supply line is upward sloping
the aggregate demand curve is downward sloping
the aggregate demand curve is horizontal
7.
Fiscal policy can shift:
Group of answer choices
both aggregate demand and short-run aggregate supply, but not
long-run aggregate supply
only short-run functions
both aggregate demand and potential output
aggregate demand only
8.
Policymakers' use of stabilisation policy to eliminate output
gaps is more appropriate when an economy self-corrects very ______
and when the output gap is very ____.
Group of answer choices
rapidly; small
slowly; large
rapidly; large
slowly; small
9.
The behaviour by the Reserve Bank is a key factor underlying the
link between ______ and _____, and is summarised by the aggregate
demand curve.
Group of answer choices
inflation; output
inflation; income
inflation; input
inflation; taxes
10.
For a given level of inflation, if bright prospects for the
future of the economy cause businesses to increase their spending
on new capital, then the _____ shifts _____.
Group of answer choices
aggregate demand curve; left
aggregate supply line; upward
aggregate supply line; downward
aggregate demand curve; right