Exam 26: The Determination of Aggregate Output, the Price Level, and the Interest Rate

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Refer to the information provided in Figure 26.2 below to answer the question(s) that follow. Figure 26.2 -Refer to Figure 26.2. Between the output levels of $600 billion and $900 billion, the relationship between the price level and output is

(Multiple Choice)

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Question 21

When the interest rate is high, planned investment is so output is .

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Question 22

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. Suppose the economy is currently at Point A producing potential output Y₀. If the government decreases spending, the economy moves to Point in the short run and to Point in the long run.

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Question 23

A decrease in government spending will decrease the equilibrium price level and decrease aggregate output, ceteris paribus.

(True/False)

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Question 24

When the general price level falls

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Question 25

To decrease output the government could adopt policies that

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Question 26

The aggregate supply curve

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Question 27

Aggregate output demanded will rise if

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Question 28

To increase output the government could

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Question 29

Which of the following will, unambiguously, increase the price level?

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Question 30

Refer to the information provided in Figure 26.3 below to answer the question(s) that follow. Figure 26.3 -Refer to Figure 26.3. A shift from AS₁ to AS₂ represents a(n)

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Question 31

All else equal, when output is low, the Fed favors a higher interest rate than it would in a high-output economy.

(True/False)

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Question 32

Which of the following equations represents equilibrium in the goods market?

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Question 33

The quantity of output supplied at different price levels is represented by the

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Question 34

An oil price increase would

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Question 35

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. If the economy is currently at Point B producing output level Y₁

(Multiple Choice)

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Question 36

The relationship between the level of prices and the total demand for all goods and services is known as

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Question 37

Government spending is a variable that is exogenous to the AS/AD model.

(True/False)

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Question 38

Refer to the information provided in Figure 26.5 below to answer the question(s) that follow. Figure 26.5 -Refer to Figure 26.5. An increase in government spending shifts the to the .

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Question 39

Decreasing government spending and decreasing the minimum wage are two policies that both work to decrease the price level.

(True/False)

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Question 40

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Exam 26: The Determination of Aggregate Output, the Price Level, and the Interest Rate

Refer to the information provided in Figure 26.2 below to answer the question(s) that follow. Figure 26.2 -Refer to Figure 26.2. Between the output levels of $600 billion and $900 billion, the relationship between the price level and output is

When the interest rate is high, planned investment is ________ so output is ________.

A decrease in government spending will decrease the equilibrium price level and decrease aggregate output, ceteris paribus.

When the general price level falls

To decrease output the government could adopt policies that

The aggregate supply curve

Aggregate output demanded will rise if

To increase output the government could

Which of the following will, unambiguously, increase the price level?

Refer to the information provided in Figure 26.3 below to answer the question(s) that follow. Figure 26.3 -Refer to Figure 26.3. A shift from AS1 to AS2 represents a(n)

All else equal, when output is low, the Fed favors a higher interest rate than it would in a high-output economy.

Which of the following equations represents equilibrium in the goods market?

The quantity of output supplied at different price levels is represented by the

An oil price increase would

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. If the economy is currently at Point B producing output level Y1

The relationship between the level of prices and the total demand for all goods and services is known as

Government spending is a variable that is exogenous to the AS/AD model.

Refer to the information provided in Figure 26.5 below to answer the question(s) that follow. Figure 26.5 -Refer to Figure 26.5. An increase in government spending shifts the ________ to the ________.

Decreasing government spending and decreasing the minimum wage are two policies that both work to decrease the price level.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: The Labor and Land Markets

Input Demand: The Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

When the interest rate is high, planned investment is so output is .

Refer to the information provided in Figure 26.3 below to answer the question(s) that follow. Figure 26.3 -Refer to Figure 26.3. A shift from AS₁ to AS₂ represents a(n)

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8 -Refer to Figure 26.8. If the economy is currently at Point B producing output level Y₁

Refer to the information provided in Figure 26.5 below to answer the question(s) that follow. Figure 26.5 -Refer to Figure 26.5. An increase in government spending shifts the to the .