Question 1

In the long run, the economy is:

Accepted Answer

A)  unstable. 
B)  self-correcting. 
C)  inflexible. 
D)  uncontrollable. 
A)  unstable. 
B)  self-correcting. 
C)  inflexible. 
D)  uncontrollable.

Question 2

The short-run aggregate supply curve will shift to the:

Accepted Answer

A)  right if commodity prices increase. 
B)  left if productivity increases. 
C)  left if nominal wages increase. 
D)  right if government spending increases. 
A)  right if commodity prices increase. 
B)  left if productivity increases. 
C)  left if nominal wages increase. 
D)  right if government spending increases.

Question 3

The aggregate demand curve:

Accepted Answer

A)  slopes downward. 
B)  slopes upward. 
C)  is horizontal at potential output. 
D)  is vertical at potential output. 
A)  slopes downward. 
B)  slopes upward. 
C)  is horizontal at potential output. 
D)  is vertical at potential output.

Question 4

If the stock of physical capital increases, all other things unchanged, the aggregate demand curve will:

Accepted Answer

A)  shift to the right. 
B)  shift to the left. 
C)  remain constant. 
D)  become positively sloped. 
A)  shift to the right. 
B)  shift to the left. 
C)  remain constant. 
D)  become positively sloped.

Question 5

When the price level increases, firms in perfectly competitive markets will:

Accepted Answer

A)  decrease output and increase the price. 
B)  decrease output. 
C)  increase output and decrease the price. 
D)  increase output. 
A)  decrease output and increase the price. 
B)  decrease output. 
C)  increase output and decrease the price. 
D)  increase output.

Question 6

The short-run aggregate supply curve illustrates:

Accepted Answer

A)  the price level at which real output will be consumed. 
B)  the price level at which real output will be in equilibrium. 
C)  the positive relationship between the aggregate price level and aggregate output supplied. 
D)  the negative relationship between the aggregate price level and aggregate output supplied. 
A)  the price level at which real output will be consumed. 
B)  the price level at which real output will be in equilibrium. 
C)  the positive relationship between the aggregate price level and aggregate output supplied. 
D)  the negative relationship between the aggregate price level and aggregate output supplied.

Question 7

The nominal wage is the dollar amount of the wage paid.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions:
Figure: Inflationary and Recessionary Gaps  
-(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. If the economy is in short-run equilibrium at Y1 in panel (a), to return to potential output at YP policy makers should use:

Accepted Answer

A)  contractionary policy. 
B)  expansionary policy. 
C)  policies to shift the SRAS to the left. 
D)  policies to shift the LRAS to the left. 
A)  contractionary policy. 
B)  expansionary policy. 
C)  policies to shift the SRAS to the left. 
D)  policies to shift the LRAS to the left.

In the long run, the economy is:

The short-run aggregate supply curve will shift to the:

The aggregate demand curve:

If the stock of physical capital increases, all other things unchanged, the aggregate demand curve will:

When the price level increases, firms in perfectly competitive markets will:

The short-run aggregate supply curve illustrates:

The nominal wage is the dollar amount of the wage paid.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 12: Aggregate Demand and Aggregate Supply

In the long run, the economy is:

The short-run aggregate supply curve will shift to the:

The aggregate demand curve:

If the stock of physical capital increases, all other things unchanged, the aggregate demand curve will:

When the price level increases, firms in perfectly competitive markets will:

The short-run aggregate supply curve illustrates:

The nominal wage is the dollar amount of the wage paid.

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters