1-Which is? true?

A. ?Cost-push inflation leads to stagflation.

B. All of these are true.

C. A depreciation of a? country’s currency could cause? demand-pull inflation.

D. ?Demand-pull inflation is the most common form of inflation.

2-Which is true in the aggregate supply? / aggregate demand? model?

A.The short run aggregate supply curve is? upward-sloping.

B.All of these.

C.The aggregate demand curve is vertical.

D.The long run aggregate supply curve is? downward-sloping.

3-Contractionary fiscal policy would consist of

A.increasing government spending? and/or decreasing taxes.

B.decreasing government spending? and/or increasing taxes.

C.increasing government spending? and/or increasing taxes.

D.decreasing government spending? and/or decreasing taxes.

4-An inflationary gap occurs when

A.actual real GDP is greater than potential real GDP.

B.the long run equilibrium is above the short run equilibrium.

C.All of these are true.

D.the current output level is below the full employment level of production.