Honors Econ Unit IV Essay Questions by liuqingyan

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									     Honors Economics – Unit IV Essay Exam*
1.   The aggregate supply curve is divided into three distinct
     ranges. Describe the slope of this curve in each of the
     three ranges. Then verify the conditions that prevail in
     the economy in each of the ranges, determine what will
     happen to output and price levels if the AD curve shifts
     within each range, and suggest how the multiplier would
     be affected.
2.   Compare and contrast the effects of expansionary and
     contractionary fiscal policy on aggregate demand,
     describe the economic conditions under which each
     would be used, and summarize the desired effects on
     the economy.
3.   Explain to a non-economist the following newspaper
     headline: “Rise in Consumer Price Index Fuels Fears of
     Inflation.” Your answer should include
        o …explanations of the terms CPI and inflation;
        o …causes of the problem;
        o …expected effects on the economy?
*I will pick one to answer

								
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