TRUE OR FALSE

13. The long run aggregate supply curve is determined by such factors as the amount of labor

and the state of technology and it is positively sloped with regard to the price level.

14. When shifts occur to the short run AS there is a self-correcting mechanism that will restore

long run equilibrium.

15. As Polleit describes, Mises argued that to stop hyperinflation in Austria in the early 1920s,

the government needed to stop printing more money.

16. Of the hyperinflations cited by Polleit (China, Brazil, Argentina, Russia, Yuhoslavia and

Zimbabwe), about half of them were totally unrelated to the fact that their governments

controlled a system of fiat money.

17. Krugman believes that the key to making monetary policy effective in the face of a liquidity

trap is to change investor's expectations about future monetary policy.

18. While Krugman suggests that monetary policy can be effective in the presence of a

liquidity trap, he laments that central bankers suffer from a credibility problem in actually

following through with this policy.

19. Shostak cites Krugman as arguing that in the face of a liquidity trap, the Fed should set a

lower target for inflation.

20. Shostak argues that a liquidity trap does not emerge from people demanding to hold more

money but rather from loose monetary and fiscal policies.

21. Miller argues that there is "never" a lack of demand, as we have infinite wants and only

limited resources to fulfill those wants.

22. Miller notes that the recovery that followed the recession of 2008-2009 was the strongest

on record since the Great Depression.