Multiple choice

1) Suppose productivity rises in a particular economy, but wages stay the same. Other things equal,       
A. the demand curve will shift leftward
B. the supply curve will shift rightward  
C. the supply curve will shift leftward    
D. expenditures curve will shift rightward

2) If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium            
A. output would rise      
B. output would fall       
C. price level would necessarily fall         
D. price level would necessarily rise

 
3) Expansionary fiscal policy is so named because it         
A. involves an expansion of the nation's money supply 
B. can only be attained by expanding government consumption               
C. is aimed at achieving greater price stability     
D. can motivate an expansion of real GDP

4) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $100 billion. To achieve full-employment output (exactly), government should    
A. increase government expenditures by $100 billion     
B. increase government expenditures by $50 billion       
C. reduce taxes by $50 billion     
D. reduce taxes by $200 billion