1.)When aggregate demand declines, the necessary adjustments will occur more _______ than if aggregate demand was increasing. In such a situation, an employer reducing wages will tend to lose her _________ workers.

slowly; worst

quickly; best

slowly; best

quickly; worst

2.) The beginning phase of an episode of demand-side deflation, beginning from equilibrium, is characterized by which of the following

A shift in both the AS and AD curves

A shift in the AD curve

A shift in the AS curve

A shift in neither the AS nor AD curve

3.)A situation in which monetary policy loses its effectiveness as nominal interest rates approach zero is known as _________.

the nominal anchor

a deflationary depressive shock

hyperdeflation

a liquidity trap

4.)When productivity increases, which of the following statements describes things that happen to aggregate supply?

Per-unit costs of production decrease

The economy's capacity to produce goods and services increases

Neither A nor B

Both A and B

5.)After a big drop in world oil prices, the country of Valeria, an oil importer, experiences a period of rapid economic growth accompanied by falling prices. This episode would best be called _______.

Exchange-rate based stabilization

Inflationary recession

Demand-side deflation

Supply-side deflation

6.)A situation in which monetary policy loses its effectiveness as nominal interest rates approach zero is known as __________

A liquidity trap

The nominal anchor

hyperdeflation

A deflationary depressive shock