If the economy is experiencing an inflationary output gap, the adjustment process operates as follows: A) wages fall, unit costs rise, and the AS curve shifts leftward.

B) wages fall, unit costs fall, and the AS curve shifts rightward.

C) wages rise, unit costs rise, and the AS curve shifts leftward.

D) wages do not adjust, but the AD curve shifts to the right.

E) wages fall, unit costs fall, and the AD curve shifts rightward. Consider a simple macro model with demand-determined output. Which of the following parameters will produce the strongest automatic stabilizer?

A) MPC = 0.8, t = 0.2, m = 0.3

B) MPC = 0.9, t = 0.2, m = 0.4

C) MPC = 0.7, t = 0.3, m = 0.2

D) MPC = 0.7, t = 0.1, m = 0.4

E) MPC = 0.8, t = 0.1, m = 0.2 Consider a simple macro model with demand-determined output. Which of the following parameters will produce the largest fluctuations in real GDP from autonomous expenditure shocks?

A) MPC = 0.7, t = 0.3, m = 0.2

B) MPC = 0.8, t = 0.2, m = 0.3

C) MPC = 0.8, t = 0.1, m = 0.2

D) MPC = 0.7, t = 0.1, m = 0.4

E) MPC = 0.9, t = 0.2, m = 0.4 8th EditionN. Gregory Mankiw814 explanations

2nd EditionDavid Anderson, Margaret Ray1,042 explanations

8th EditionN. Gregory Mankiw502 explanations

10th EditionAlan J. Marcus, Alex Kane, Zvi Bodie870 explanations