3.5 - 3.8

This graph is showing...

• Inflationary Gap

• Recessionary Gap

• Equilibrium/Full Employment

This graph is showing...

• Inflationary Gap

• Recessionary Gap

• Equilibrium/Full Employment

This graph is showing...

• Inflationary Gap

• Recessionary Gap

• Equilibrium/Full Employment

Which of the following is an example of an expansionary fiscal policy?

• An increase in income tax rates

• An increase in government expenditures

• A decrease in transfer payments

• An increase in the price level

• An increase in consumption spending

Draw a correctly labeled graph of SRAS, LRAS, and AD

In your own words, define Fiscal Policy

A Positive Demand Shock will

• Increase Aggregate Demand

• Decrease Short-run Aggregate Supply

• Decrease Aggregate Demand

• Increase Long-run Aggregate Supply

The natural rate of unemployment can be defined as the

• unemployment rate consistent with accelerating inflation

• unemployment rate of the least-skilled workers

• economy’s long-run equilibrium rate of unemployment

• labor force participation rate plus the unemployment rate

• labor force participation rate minus the unemployment rate

The graph shows the demand for and supply of a good. If the market price is P₁, then

• there is a shortage, and the price will rise

• there is a shortage, and the price will fall

• there is a surplus, and the price will rise

• there is a surplus, and the price will fall

• demand will decrease and supply will increase

Draw what would happen if the US saw and increase in imports