TRUE OR FALSE
a. When potential real GDP is equal to actual real GDP, there is nounemployment.
b. A significant increase in wages will shift aggregate supplycurve to the right in the short run.
c. When the government decided to reduce their spending, then theaggregate supply curve will decrease or shift to the left in theshort run.
d. If the central Bank wants to expand aggregate demand, it canincrease the money supply, which would increase the interestrate.
e. To find spending multiplier, we have to calculate one divided bymarginal propensity to consume.
Explain why true and why false!
