Week 11

Assuming a closed economy, how would a simultaneous and unanticipated technological innovation in both the consumer goods and capital goods sectors most likely affect the aggregate supply curve?

In an open economy operating under a floating exchange rate regime, a sudden and significant increase in domestic labor productivity, all else being equal, would most likely lead to which of the following?

Considering a scenario where a country's central bank credibly announces a future increase in the inflation target, how would this announcement most likely impact current aggregate demand and short-run aggregate supply?

If a country experiences a simultaneous increase in both immigration and technological advancements in its manufacturing sector, what would be the predicted long-run effect on the equilibrium real wage and aggregate supply?

In a small open economy with perfect capital mobility operating under a fixed exchange rate, what is the likely effect of expansionary fiscal policy on domestic output and the money supply?

Suppose a country is experiencing stagflation characterized by both high inflation and high unemployment. Which policy mix is most likely to restore the economy to its long-run equilibrium?

Consider an economy where the central bank targets nominal GDP. If there is a negative supply shock that reduces output, how would the central bank most likely respond, and what would be the potential consequences?

If a country experiences a sudden, unanticipated decrease in consumer confidence coupled with a simultaneous increase in global commodity prices, what is the most likely short-run impact on the country's inflation rate and unemployment rate?

Suppose a country's government implements a policy to increase labor force participation among older workers while simultaneously enacting stricter environmental regulations that increase production costs for firms. What would be the most likely long-run effect on the economy's potential output and average price level?

In an economy characterized by sticky wages and prices, if the central bank unexpectedly decreases the money supply, what would be the most likely short-run effect on real GDP and the price level?

Given a scenario where a country experiences a significant and persistent decrease in global demand for its primary export commodity, and the government simultaneously increases taxes on corporate profits, what would be the most likely long-run impact on the domestic capital stock and aggregate supply?

Suppose an economy is operating at its natural rate of unemployment, and the government unexpectedly announces a large, permanent increase in government spending financed by borrowing. What would be the most likely long-run effect on real interest rates and the price level?

In a large, open economy with flexible exchange rates, if the central bank implements a policy of quantitative tightening (reducing its balance sheet) while the government simultaneously reduces income taxes, what would be the predicted impact on net exports and aggregate demand?

If a country's labor force participation rate significantly declines due to an aging population, and there is a simultaneous decrease in private investment as firms anticipate lower future demand, what is the most likely long-run impact on the country's potential GDP growth rate and natural rate of unemployment?

Assume an economy experiences a sudden and sustained increase in the price of imported energy, coupled with a simultaneous implementation of stricter regulations on domestic production that increases costs for firms. What is the most probable short-run impact on the Phillips curve?

Considering a scenario where a country's central bank adopts a negative interest rate policy (NIRP) while the government simultaneously increases infrastructure spending financed by new debt, what would be the predicted impact on bank lending and aggregate demand?

Suppose a country experiences a large, unanticipated influx of skilled labor due to immigration, and the government simultaneously increases spending on education and retraining programs. What would be the most likely long-run impact on income inequality and potential GDP?

If a country's central bank credibly commits to a policy of strict inflation targeting, and the government simultaneously reduces regulations on business investment, what would be the most likely impact on macroeconomic stability and long-run economic growth?

Assume a country experiences a sudden and large decline in consumer confidence due to geopolitical instability, coupled with a simultaneous increase in the effective tax rate on capital gains. What is the most likely short-run impact on aggregate investment and household saving?

In an economy with rational expectations, if the central bank announces a future increase in the money supply to combat a recession, but the announcement lacks credibility, what is the most likely short-run impact on inflation and output?