1 ) Which of the following statements about the short run aggregate supply curve (SRAS) is true A A higher price level will increase aggregate supply, shifting the SRAS to the right B An increase in the wage rate will increase aggregate supply, shifting the SRAS to the right C A lower price level will reduce the aggregate quantity of output supplied in the short run D A decrease in business taxes will reduce aggregate supply, shifting the SRAS to the left E A horizontal SRAS shows that higher output prices are needed to increase output in the short run 2 ) Use the table to answer the question that follows Year Price of Good A Quantity of Good A Price of Good B Quantity of Good B 1 $10 5 $12 6 2 $15 5 $12 7 The economy produced only two goods with the prices and quantities of each good for year 1 and year 2 shown above Which of the following is true A Nominal GDP increased from year 1 to year 2, but Real GDP did not change from year 1 to year 2 B Nominal GDP and real GDP both increased from year 1 to year 2 C There was no change in the price level or inflation from year 1 to year 2 D Nominal GDP decreased from year 1 to year 2, but real GDP increased from year 1 to year 2 E Nominal GDP increased from year 1 to year 2, but the change in real GDP is indeterminate

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1.) Which of the following statements about the short-run aggregate supply curve (SRAS) is true? A. A higher price level will increase aggregate supply, shifting

1.) Which of the following statements about the short-run aggregate supply curve (SRAS) is true?

A. A higher price level will increase aggregate supply, shifting the SRAS to the right. B. An increase in the wage rate will increase aggregate supply, shifting the SRAS to the right. C. A lower price level will reduce the aggregate quantity of output supplied in the short run. D. A decrease in business taxes will reduce aggregate supply, shifting the SRAS to the left. E. A horizontal SRAS shows that higher output prices are needed to increase output in the short run.

2.) Use the table to answer the question that follows.

Year	Price of Good A	Quantity of Good A	Price of Good B	Quantity of Good B
1	$10	5	$12	6
2	$15	5	$12	7

The economy produced only two goods with the prices and quantities of each good for year 1 and year 2 shown above. Which of the following is true?

A. Nominal GDP increased from year 1 to year 2, but Real GDP did not change from year 1 to year 2. B. Nominal GDP and real GDP both increased from year 1 to year 2. C. There was no change in the price level or inflation from year 1 to year 2. D. Nominal GDP decreased from year 1 to year 2, but real GDP increased from year 1 to year 2. E. Nominal GDP increased from year 1 to year 2, but the change in real GDP is indeterminate.