AD-AS Analysis Drill 2

A cut in personal income taxes shifts AD right because it:

In the long run, a one-time increase in the money supply mainly affects:

A boom in the stock market that raises household wealth shifts:

Supply-side economists argue that cutting marginal tax rates can shift LRAS right by:

An appreciation of the domestic currency shifts AD left because:

The interest-rate effect explains part of the AD curve's slope: a lower price level:

If expected inflation rises, the short-run Phillips curve:

A wage-price spiral is most likely when:

The self-correcting mechanism: a recessionary gap eventually closes as:

In AD-AS, an inflationary gap (actual GDP above potential) will tend to cause: