In a Short-Run Macroeconomic Equilibrium, Potential GDP Exceeds Real GDP

question 375

Multiple Choice

In a short-run macroeconomic equilibrium, potential GDP exceeds real GDP. If aggregate demand does not change, then the

• A) short-run aggregate supply curve will shift rightward as the money wage rate falls.
• B) short-run aggregate supply curve will shift leftward as the money wage rate rises.
• C) long-run aggregate supply curve will shift leftward as the money wage rate rises.
• D) long-run aggregate supply curve will shift leftward as the money wage rate falls.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for implementing monetary policy, supervising banks, and providing financial services.

Bill of Exchange

A written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), to a third party (the payee) or to bearer.

Draft

A draft refers to the compulsory enrollment of individuals into military service, or can refer to the preliminary version of a document or plan.

Payee

The person or entity to whom a check, draft, or promissory note is made payable.