14. Texomabourg is a small island nation. Suppose that producers in Texomabourg experience a devastating earthquake, tsunami, drought, and plague of locusts that decrease productivity for many years. How will this affect the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve? SRAS; LRAS (A) No change; Decreases (B) Increases; Decreases (C) Decreases; Decreases (D) Decreases; No change (E) Increases; Increases

15. Suppose that nominal wages decrease across the economy. How will this affect the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve? SRAS; LRAS (A) Decreases; increases (B) Increases; No change (C) No change; No change (D) Increases; Increases (E) Increases; Decreases

16. Suppose that nominal wages increase across the economy. How will this affect the short-run aggregate supply (SRAS) curve and the long-run aggregate (LRAS) supply curve? SRAS; LRAS (A) Decreases; No change (B) Decreases; Decreases (C) No change; No change (D) Increases; No change (E) Decreases; Increases

17. We are told that the nation's potential output has increased. In a graph this means that (A) aggregate demand has increased (B) short-run aggregate supply has decreased (C) long-run aggregate supply has increased (D) short-run aggregate supply has increased (E) long-run aggregate supply has decreased

18. Which of the following would cause a nation's potential real gross domestic product (GDP) to increase? (A) A decrease in energy prices (B) A decrease in personal income taxes (C) A decrease in nominal wages (D) A tax credit given to firms that invest in new technology (E) An increase in commodity prices

19. Which of the following would cause a nation's potential real gross domestic product (GDP) to decrease? (A) A decrease in energy prices (B) An increase in personal income taxes (C) A decrease in high school graduation rates (D) An increase in nominal wages (E) An increase in labor productivity

20. If a nation's level of potential real gross domestic product (GDP) has decreased, it must be the case that (A) aggregate demand has decreased (B) short-run aggregate supply has decreased (C) long-run aggregate supply has increased (D) short-run aggregate supply has increased (E) long-run aggregate supply has decreased