A reduction in nominal wages will cause which of the following?
A) a leftward shift in the short-run aggregate supply curve to shift to the left
B) a movement along the short-run aggregate supply curve
C) a shift of both the short-run and long-run aggregate supply curves
D) a rightward shift in the short-run aggregate supply curve
D
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Disintermediation refers to the
A) failure of financial intermediaries due to moral hazard problems. B) failure of financial intermediaries due to adverse selection problems. C) movement of savers and borrowers from banks to financial markets. D) removal of government regulations of financial intermediaries.
According to monetarists, the natural rate theory
a. denies the tradeoff between inflation and output. b. argues that there is a stable tradeoff between inflation and output. c. shows that activist policies work best. d. believes that the Phillips curve relationship breaks down when policymakers attempt to use it.