Question 1

The relationship between the price level and the quantity of real GDP supplied is

Accepted Answer

A)  full employment output. 
B)  inflationary or recessionary gap. 
C)  aggregate supply. 
D)  supply-side equilibrium. 
A)  full employment output. 
B)  inflationary or recessionary gap. 
C)  aggregate supply. 
D)  supply-side equilibrium.

Question 2

When price level is considered,the value of the multiplier will be less than that suggested by the oversimplified version of multiplier.Why?

Accepted Answer

As long as the aggregate supply curve sl

Question 3

Figure 10-9  
-Figure 10-9 describes which of the following periods in the U.S.?

Accepted Answer

A)  1930s 
B)  1973-1975 
C)  late 1990s 
D)  2007-2009 
A)  1930s 
B)  1973-1975 
C)  late 1990s 
D)  2007-2009

Question 4

Describe the main explanations for the downward rigidity of wages in the modern macroeconomy.Evaluate their probability of being correct and important.

Accepted Answer

One reason is the existence of instituti

Question 5

Using the concepts of aggregate demand and aggregate supply,explain how the economy reaches an equilibrium level of real GDP and price level.

Accepted Answer

Equilibrium of real GDP and price level

Question 6

"Stagflation" refers to the unwelcome combination of

Accepted Answer

A)  inflation and rising prices. 
B)  deflation and unemployment. 
C)  inflation and unemployment. 
D)  inflation and expansion. 
A)  inflation and rising prices. 
B)  deflation and unemployment. 
C)  inflation and unemployment. 
D)  inflation and expansion.

Question 7

When inflation occurs,consumers

Accepted Answer

A)  realize gains in their wealth. 
B)  increase spending to catch up with higher prices. 
C)  automatically shift the consumption line upward. 
D)  suffer a decrease in real wealth. 
A)  realize gains in their wealth. 
B)  increase spending to catch up with higher prices. 
C)  automatically shift the consumption line upward. 
D)  suffer a decrease in real wealth.

Question 8

The existence of an inflationary gap or an recessionary gap depends on the

Accepted Answer

A)  aggregate supply only. 
B)  expenditure schedule. 
C)  leakages schedule. 
D)  injections schedule. 
E)  aggregate demand and aggregate supply schedules. 
A)  aggregate supply only. 
B)  expenditure schedule. 
C)  leakages schedule. 
D)  injections schedule. 
E)  aggregate demand and aggregate supply schedules.

Question 9

Input prices are fixed for a period of time and this causes firms to increase production as prices increase.

Accepted Answer

A) True 
 B)False

Question 10

If wages or prices of other inputs change,the aggregate supply curve will shift to another position.

Accepted Answer

A) True 
 B)False

Question 11

The aggregate supply curve slopes

Accepted Answer

A)  downward because firms can sell more at lower prices. 
B)  downward because firms can hire more workers at lower prices. 
C)  upward because firms want to hire more workers at higher wage levels. 
D)  upward because firms can hire labor at fixed wages for short-run periods. 
A)  downward because firms can sell more at lower prices. 
B)  downward because firms can hire more workers at lower prices. 
C)  upward because firms want to hire more workers at higher wage levels. 
D)  upward because firms can hire labor at fixed wages for short-run periods.

Question 12

A common error of business managers is to blame inflation on

Accepted Answer

A)  consumer spending. 
B)  rising wages. 
C)  rising prices. 
D)  rising interest rates. 
E)  rising unemployment. 
A)  consumer spending. 
B)  rising wages. 
C)  rising prices. 
D)  rising interest rates. 
E)  rising unemployment.

Question 13

In 1973,the U.S.experienced a decline in output and high inflation.

Accepted Answer

A) True 
 B)False

Question 14

The existence of an inflationary gap should cause

Accepted Answer

A)  wages to fall. 
B)  prices to fall. 
C)  unemployment to rise. 
D)  net exports to rise. 
A)  wages to fall. 
B)  prices to fall. 
C)  unemployment to rise. 
D)  net exports to rise.

Question 15

When money wages rise,the most significant effect on the aggregate supply curve is that it

Accepted Answer

A)  shifts outward. 
B)  shifts inward. 
C)  becomes flatter. 
D)  becomes steeper. 
A)  shifts outward. 
B)  shifts inward. 
C)  becomes flatter. 
D)  becomes steeper.

Question 16

As a result of the war in Afghanistan,the population of Afghanistan as well as their capital stock was reduced.This can be illustrated by aggregate supply curve

Accepted Answer

A)  shifting outward. 
B)  becoming flatter. 
C)  shifting inward. 
D)  becoming more elastic. 
A)  shifting outward. 
B)  becoming flatter. 
C)  shifting inward. 
D)  becoming more elastic.

Question 17

In spite of the fact that unemployment rates were at a 30-year low in 1996-2000,the United States economy also experienced

Accepted Answer

A)  declining inflation. 
B)  balance of payments surpluses. 
C)  large budget deficits. 
D)  low growth. 
A)  declining inflation. 
B)  balance of payments surpluses. 
C)  large budget deficits. 
D)  low growth.

Question 18

Figure 10-2  
-In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

Accepted Answer

A)  AB 
B)  BC 
C)  CD 
D)  DG 
A)  AB 
B)  BC 
C)  CD 
D)  DG

Question 19

The economy's self-correcting mechanism appears to be more efficient at curing

Accepted Answer

A)  recessionary gaps by reducing price levels. 
B)  inflationary gaps by reducing price levels. 
C)  unemployment by reducing wage levels. 
D)  inflationary gaps through inflation. 
A)  recessionary gaps by reducing price levels. 
B)  inflationary gaps by reducing price levels. 
C)  unemployment by reducing wage levels. 
D)  inflationary gaps through inflation.

Question 20

Recessionary gap arises when

Accepted Answer

A)  inventory stock falls. 
B)  government spending increases. 
C)  when the general price level increases. 
D)  there is less spending than desired. 
A)  inventory stock falls. 
B)  government spending increases. 
C)  when the general price level increases. 
D)  there is less spending than desired.

The relationship between the price level and the quantity of real GDP supplied is

When price level is considered,the value of the multiplier will be less than that suggested by the oversimplified version of multiplier.Why?

Figure 10-9 -Figure 10-9 describes which of the following periods in the U.S.?

Describe the main explanations for the downward rigidity of wages in the modern macroeconomy.Evaluate their probability of being correct and important.

Using the concepts of aggregate demand and aggregate supply,explain how the economy reaches an equilibrium level of real GDP and price level.

"Stagflation" refers to the unwelcome combination of

When inflation occurs,consumers

The existence of an inflationary gap or an recessionary gap depends on the

Input prices are fixed for a period of time and this causes firms to increase production as prices increase.

If wages or prices of other inputs change,the aggregate supply curve will shift to another position.

The aggregate supply curve slopes

A common error of business managers is to blame inflation on

In 1973,the U.S.experienced a decline in output and high inflation.

The existence of an inflationary gap should cause

When money wages rise,the most significant effect on the aggregate supply curve is that it

As a result of the war in Afghanistan,the population of Afghanistan as well as their capital stock was reduced.This can be illustrated by aggregate supply curve

In spite of the fact that unemployment rates were at a 30-year low in 1996-2000,the United States economy also experienced

Figure 10-2 -In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

The economy's self-correcting mechanism appears to be more efficient at curing

Recessionary gap arises when

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

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Exam 10: Bringing In The Supply Side Unemployment and Inflation

The relationship between the price level and the quantity of real GDP supplied is

When price level is considered,the value of the multiplier will be less than that suggested by the oversimplified version of multiplier.Why?

Figure 10-9 -Figure 10-9 describes which of the following periods in the U.S.?

Describe the main explanations for the downward rigidity of wages in the modern macroeconomy.Evaluate their probability of being correct and important.

Using the concepts of aggregate demand and aggregate supply,explain how the economy reaches an equilibrium level of real GDP and price level.

"Stagflation" refers to the unwelcome combination of

When inflation occurs,consumers

The existence of an inflationary gap or an recessionary gap depends on the

Input prices are fixed for a period of time and this causes firms to increase production as prices increase.

If wages or prices of other inputs change,the aggregate supply curve will shift to another position.

The aggregate supply curve slopes

A common error of business managers is to blame inflation on

In 1973,the U.S.experienced a decline in output and high inflation.

The existence of an inflationary gap should cause

When money wages rise,the most significant effect on the aggregate supply curve is that it

As a result of the war in Afghanistan,the population of Afghanistan as well as their capital stock was reduced.This can be illustrated by aggregate supply curve

In spite of the fact that unemployment rates were at a 30-year low in 1996-2000,the United States economy also experienced

Figure 10-2 -In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

The economy's self-correcting mechanism appears to be more efficient at curing

Recessionary gap arises when

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters