JH F.. 1...... A leftward shift of the aggregate supply curve results in stagflation. 2 . If there is an increase in the price of factor costs, the short-run Phillips Curve will shift left. T F 3. Stagflation always means a higher misery index. T 4. Tariffs lead to low inflation rates by encouraging domestic production of goods F 5. Expansionary fiscal policy through changing taxes and transfers during a recession shifts the production-possibilities curve outward. T F 6. The Phillips Curve shows an inverse relationship between inflation and interest rates. T F 7. An increase in human capital investment will shift the long-run aggregate supply curve to the right. T F 8. A shift of the long-run aggregate supply to the right could also be depicted as a movement from inside the PPC to on to the PPC. .9. Monetary and fiscal stimulus designed to stimulate consumption likely result in: (a) A rightward shift of the Phillips curve. b) A rightward shift in aggregate demand. c) Both higher unemployment and inflation rates. (d) All of the above. 10. Which of the following would most likely cause the short-run Phillips Curve to shift right? a) An increase in the price of oil and other factor inputs. (b) An increase in government spending on infrastructure. (c) A tax rebate provided to consumers during a recession. (d) An increase in the discount rate during a period of inflation. 11. Stagflation is most likely occurring when there is: (a) A rightward shift of the aggregate supply curve. (b) A higher value of the misery index. (c) A shift leftward of the Phillips curve. (d) A shift outward of the production possibilities curve. 12 . If a tax rebate is provided during a recession then: (a) Short-run Phillips Curve will shift left. (b) Short-run Phillips Curve will shift right. (c) There will be a movement up the short-run Phillips Curve. (d) There will be a movement down the short-run Phillips Curve