Demand-pull inflation occurs
A) when the aggregate supply curve shifts to the right, while aggregate demand remains stable.
B) when the aggregate demand curve shifts to the right, while aggregate supply remains stable.
C) when the aggregate demand curve shifts to the left, while aggregate supply remains stable.
D) when the aggregate supply curve shifts to the left, while aggregate demand remains stable.
B
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Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country A will tend to ________ and employment in country A will tend to ________
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
If unemployment is above the natural rate, GDP is below potential output
a. True b. False