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If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio

If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio
Transcribed Image Text:If the expenditure multiplier is 2, and households save the extra income which they receive from a £1bn tax cut, then we expect the change in national income to be 0 -£0.5bn +2bn +£0.5bn Which of these statements reflects the assumptions which New Classical economists typically make about aggregate supply? Both long-run and short-run AS curves slope upwards, but the short-run curve is steeper than the long-run curve There is a single AS curve, which is horizontal when there is unemployment, and vertical when there is full employment The short-run AS curve is horizontal, but the long-run AS curve is vertical The long run AS curve is vertical, and the short run AS is upward sloping Cost push inflation occurs when The government increases its budget deficit Anticipating inflation, households accelerate purchases The price of commodities used in production increases Monetary financial institutions increase their liquidity ratio
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