Suppose real GDP is equal to potential GDP. Explain what happens if the aggregate demand curve shifts either rightward or leftward.
107) If the money wage rate is constant and the price level rises, what happens to the real wage rate, firms' profits, and the quantity of real GDP supplied?
108) Consider an open economy in which the aggregate supply curve slopes upward in the short-run. Firms in this nation do not import raw materials from abroad, but foreign residents purchase much of the nations output. What is the most likely short-run effect on this nations economy if there is a significant downturn in economic activity in other nations around the world.
109) Explain what is meant by cost-push inflation?
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