Question 1

-In the above figure, which movement illustrates the impact of a rising price level and a constant money wage rate?

Accepted Answer

A)  E to G 
B)  E to K 
C)  E to I 
D)  E to F 
A)  E to G 
B)  E to K 
C)  E to I 
D)  E to F

Question 2

The short- run aggregate supply curve is upward sloping because in the short run the

Accepted Answer

A)  both the money wage rate and the price level change. 
B)  neither the money wage rate nor the price level can change. 
C)  price level changes but the money wage rate does not. 
D)  money wage rate changes but the price level does not. 
A)  both the money wage rate and the price level change. 
B)  neither the money wage rate nor the price level can change. 
C)  price level changes but the money wage rate does not. 
D)  money wage rate changes but the price level does not.

Question 3

As the price level falls and other things remain the same, real wealth and .

Accepted Answer

A)  decreases; short- run aggregate supply decreases 
B)  increases; the quantity of real GDP demanded increases 
C)  increases; aggregate demand increases 
D)  decreases; the quantity of real GDP demanded decreases 
A)  decreases; short- run aggregate supply decreases 
B)  increases; the quantity of real GDP demanded increases 
C)  increases; aggregate demand increases 
D)  decreases; the quantity of real GDP demanded decreases

Question 4

A fall in the expected future inflation rate

Accepted Answer

A)  increases the aggregate quantity demanded. 
B)  increases aggregate demand. 
C)  decreases the aggregate quantity demanded. 
D)  decreases aggregate demand. 
A)  increases the aggregate quantity demanded. 
B)  increases aggregate demand. 
C)  decreases the aggregate quantity demanded. 
D)  decreases aggregate demand.

Question 5

In the short run, an increase in aggregate demand

Accepted Answer

A)  lowers the price level and increases real GDP. 
B)  raises the price level and increases real GDP. 
C)  raises the price level and decreases real GDP. 
D)  lowers the price level and decreases real GDP. 
A)  lowers the price level and increases real GDP. 
B)  raises the price level and increases real GDP. 
C)  raises the price level and decreases real GDP. 
D)  lowers the price level and decreases real GDP.

Question 6

Aggregate supply describes the behavior of

Accepted Answer

A)  households. 
B)  producers. 
C)  government. 
D)  foreign buyers. 
A)  households. 
B)  producers. 
C)  government. 
D)  foreign buyers.

Question 7

-The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Sparta's real GDP in the short run?

Accepted Answer

A)  a fall in resource prices 
B)  a decrease in taxes 
C)  a decrease in government expenditure 
D)  an increase in investment 
A)  a fall in resource prices 
B)  a decrease in taxes 
C)  a decrease in government expenditure 
D)  an increase in investment

Question 8

An increase in the quantity of capital shifts the _ _ curve _ and the curve
)

Accepted Answer

A)  AD; leftward; SAS; rightward 
B)  AD; rightward; SAS; leftward 
C)  LAS; leftward; SAS; leftward 
D)  LAS; rightward; SAS; rightward 
A)  AD; leftward; SAS; rightward 
B)  AD; rightward; SAS; leftward 
C)  LAS; leftward; SAS; leftward 
D)  LAS; rightward; SAS; rightward

Question 9

A lower price level combined with a decrease in real GDP occurs when the

Accepted Answer

A)  aggregate demand curve shifts rightward. 
B)  short- run aggregate supply curve shifts rightward. 
C)  short- run aggregate supply curve shifts leftward. 
D)  aggregate demand curve shifts leftward. 
A)  aggregate demand curve shifts rightward. 
B)  short- run aggregate supply curve shifts rightward. 
C)  short- run aggregate supply curve shifts leftward. 
D)  aggregate demand curve shifts leftward.

Question 10

According to the intertemporal substitution effect, a higher price level

Accepted Answer

A)  makes it less costly for people to buy houses and cars. 
B)  increases the quantity of real GDP demanded. 
C)  decreases the quantity of real GDP demanded. 
D)  lowers the costs of building new plants and equipment. 
A)  makes it less costly for people to buy houses and cars. 
B)  increases the quantity of real GDP demanded. 
C)  decreases the quantity of real GDP demanded. 
D)  lowers the costs of building new plants and equipment.

Question 11

Full- employment equilibrium occurs when

Accepted Answer

A)  potential GDP exceeds real GDP. 
B)  real GDP exceeds potential GDP. 
C)  real GDP equals potential GDP. 
D)  a result of an increase in long- run aggregate supply. 
A)  potential GDP exceeds real GDP. 
B)  real GDP exceeds potential GDP. 
C)  real GDP equals potential GDP. 
D)  a result of an increase in long- run aggregate supply.

Question 12

A decrease in expected future income

Accepted Answer

A)  increases the aggregate quantity demanded. 
B)  decreases aggregate demand. 
C)  decreases the aggregate quantity demanded. 
D)  increases aggregate demand. 
A)  increases the aggregate quantity demanded. 
B)  decreases aggregate demand. 
C)  decreases the aggregate quantity demanded. 
D)  increases aggregate demand.

-In the above figure, which movement illustrates the impact of a rising price level and a constant money wage rate?

The short- run aggregate supply curve is upward sloping because in the short run the

As the price level falls and other things remain the same, real wealth and .

A fall in the expected future inflation rate

In the short run, an increase in aggregate demand

Aggregate supply describes the behavior of

-The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Sparta's real GDP in the short run?

An increase in the quantity of capital shifts the _ _ curve _ and the curve )

A lower price level combined with a decrease in real GDP occurs when the

According to the intertemporal substitution effect, a higher price level

Full- employment equilibrium occurs when

A decrease in expected future income

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 10: Aggregate Supply and Aggregate Demand

-In the above figure, which movement illustrates the impact of a rising price level and a constant money wage rate?

The short- run aggregate supply curve is upward sloping because in the short run the

As the price level falls and other things remain the same, real wealth and .

A fall in the expected future inflation rate

In the short run, an increase in aggregate demand

Aggregate supply describes the behavior of

-The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Sparta's real GDP in the short run?

An increase in the quantity of capital shifts the _ _ curve _ and the curve )

A lower price level combined with a decrease in real GDP occurs when the

According to the intertemporal substitution effect, a higher price level

Full- employment equilibrium occurs when

A decrease in expected future income

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters