1. Wages and prices will fall when unemployment falls below its natural rate. _________ (True/False)
2. The short run in macroeconomics is the time period over which _________ do not adjust to economic conditions.
3. According to the logic of the wage–price spiral, an increase in wages leads to a(n) _________ in _________, which in turn leads to a(n) _________ in _________.
4. An increase in aggregate demand increases the full employment output. _________ (True/False)
5. If output is less than potential output, prices _________ and the short-run aggregate supply curve shifts _________.
6. Output will automatically return to full employment in the long run if it deviates from full employment. _________ (True/False)
7. An increase in money supply can further lower interest rates if they are initially equal to zero. _________ (True/False)
8.As the price level increases, the demand for money _________ and interest rates _________.
9. If output is above full employment, we expect wages and prices to rise, money demand to increase, and interest rates to fall. _________ (True/False)
10. An increase in the money supply will lower the nominal rate of interest in the long run. _________ (True/False)
11. An increase in taxes will _________ interest rates in the long run.
12. Professors Don _________ and Franco _________ developed the adjustment-process model used in this chapter.
13.Keynes’s objection to Say’s law was that it is possible for demand to create its own supply. _________ (True/ False)
14. Economists who believe in secular stagnation do not believe in Say’s Law. _________ (True/False)
15. David Ricardo and John Stuart Mill are known as _________ economists.