Economic growth due to labor force expansion or capital investments will result in
I. A leftward shift of short-run aggregate supply.
II. A rightward shift in long-run aggregate supply.
A) I only B) II only C) Both I and II D) Neither I nor II
B
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In the ISLM framework, the impact of monetary policy on equilibrium income is less when
A) money demand = money supply. B) money demand is infinitely elastic. C) the interest rate is low. D) the investment function has lower interest-sensitivity.
Which of the following would not cause any kind of an outward shift of a nation's production possibilities curve [PPC]?
a. An improvement in the general level of education b. Technological innovation c. Discovery of a new source of energy d. An increase in the size of the labor force e. A flood that renders thousands of acres of farmland unusable