36. Other things the same, as the price level rises, a. the interest rate rises causing aggregate demand to shift. b. the interest rate rises causing a movement along a given aggregate-demand curve. c. the interest rate falls causing aggregate demand to shift. d. the interest rate falls causing a movement along a given aggregate-demand curve. 37. The multiplier effect states that there are additional shifts in aggregate demand from fiscal policy, because it a. reduces investment and thereby increases consumer spending. b. increases the money supply and thereby reduces interest rates. c. increases income and thereby increases consumer spending. d. decreases income and thereby increases consumer spending. 38. To decrease the interest rate the Federal Reserve could a. buy bonds. The fall in the interest rate would increase investment spending b. buy bonds. The fall in the interest rate would decrease investment spending. c. sell bonds. The fall in the interest rate would increase investment spending d. sell bonds, The fall in the interest rate would decrease investment spending. 39. A policy change that changes the natural rate of unemployment changes a. neither the long-run Phillips curve nor the long-run aggregate supply curve. b. both the long-run Phillips curve and the long-run aggregate supply curve. c. the long-run Phillips curve, but not the long-run aggregate supply curve. d. the long-run aggregate supply curve, but not the long-run Phillips curve. 40. If the central bank increases the money supply, in the short run, output a. rises so unemployment rises. b. rises so unemployment falls. c. falls so unemployment rises. d. falls so unemployment falls. 41. Which of the following results in higher inflation and higher unemployment in the short run? a. a more expansionary monetary policy. b. a more contractionary monctary policy. c. a decrease in the minimum wage. d. an adverse supply shock such as an increase in the price of oil. 42. A movement to the left along a given short-run Phillips curve could be caused by a. a reduction in the natural rate of unemployment or expansionary monetary policy. b. expansionary monetary policy, but not a reduction in the natural rate of unemployment. c. either a reduction in the natural rate of unemployment or a contractionary monetary policy. d. contractionary monetary policy, but not a reduction in the natural rate of unemployment. 43. In the long run, inflation a. and unemployment are primarily determined by labor market factors. b. and unemployment are primarily determined by the rate of money supply growth. c. is primarily determined by the rate of money supply growth while unemployment is primarily determined by labor market factors. d. is primarily determined by labor market factors while unemployment is primarily determined by the rate of money supply growth