Suppose that a small economy that produces mostly agricultural goods experiences a year with exceptionally good conditions for growing crops. The good weather would
a. shift both the short-run aggregate supply and the short-run Phillips curve right.
b. shift both the short-run aggregate supply and the short-run Phillips curve left.
c. shift the short-run aggregate supply curve to the right, and the short-run Phillips curve to the left.
d. shift the short-run aggregate supply curve to the left, and the short-run Phillips curve to the right.
c
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According to classical economists, the increase in the unemployment rate in recessions occurs because
A) aggregate demand is insufficient. B) the time needed to find a job rises in recessions. C) labor unions prevent firms from cutting wages. D) firms will replace workers by machines.
Easy monetary policy will ________ net exports as a result of a ________ currency.
A. increase; weaker B. decrease; weaker C. decrease; stronger D. increase; stronger