Question 1

The figure given below depicts long run equilibrium in an aggregate demand-aggregate supply model.Which of the following is indicated by the arrow given in this figure?

Accepted Answer

A) A decrease in capital stock 
B) An increase in long-run aggregate supply 
C) An increase in nominal wage 
D) A decrease in long-run aggregate supply 
E) A decrease in the aggregate quantity demanded 
A) A decrease in capital stock 
B) An increase in long-run aggregate supply 
C) An increase in nominal wage 
D) A decrease in long-run aggregate supply 
E) A decrease in the aggregate quantity demanded

Question 2

The figure below shows the short-run aggregate supply curve of an economy.In this figure,a recessionary gap would be represented by the distance between:

Accepted Answer

A) Y1and Y2. 
B) Y1and Y3. 
C) Y2and Y3. 
D) P3and P1. 
E) P3and P2. 
A) Y1and Y2. 
B) Y1and Y3. 
C) Y2and Y3. 
D) P3and P1. 
E) P3and P2.

Question 3

If resource prices are flexible,the long-run aggregate supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is generally true of nominal wages?

Accepted Answer

A) In the long run,nominal wages tend to equal real wages. 
B) Nominal wages are more flexible downward than upward. 
C) Nominal wages are more flexible than prices. 
D) Nominal wages tend to adjust slowly in the downward direction. 
E) Nominal wages do not rise during labor shortages. 
A) In the long run,nominal wages tend to equal real wages. 
B) Nominal wages are more flexible downward than upward. 
C) Nominal wages are more flexible than prices. 
D) Nominal wages tend to adjust slowly in the downward direction. 
E) Nominal wages do not rise during labor shortages.

Question 5

The main effect of an increase in capital stock is a(n):

Accepted Answer

A) rightward shift of the long-run aggregate supply curve. 
B) rightward shift of the aggregate demand curve. 
C) leftward shift of the long-run aggregate supply curve. 
D) leftward shift of the aggregate demand curve. 
E) increase in price and output levels. 
A) rightward shift of the long-run aggregate supply curve. 
B) rightward shift of the aggregate demand curve. 
C) leftward shift of the long-run aggregate supply curve. 
D) leftward shift of the aggregate demand curve. 
E) increase in price and output levels.

Question 6

Suppose the price level increases by 5 percent and the nominal wages of workers increase by 3 percent during a particular year.This implies that the real wage has:

Accepted Answer

A) declined by 2 percent. 
B) declined by 8 percent. 
C) also increased by 2 percent. 
D) also increased by 8 percent. 
E) remained constant. 
A) declined by 2 percent. 
B) declined by 8 percent. 
C) also increased by 2 percent. 
D) also increased by 8 percent. 
E) remained constant.

Question 7

An increase in the federal minimum wage will shift the long-run aggregate supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 8

An expansionary gap generally creates inflationary pressure in an economy.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following supply shocks will shift the long-run aggregate supply curve outward?

Accepted Answer

A) An increase in business taxes 
B) An increase in gasoline taxes 
C) An increase in the cost of raw materials 
D) An increase in the amount and cost of government regulation 
E) An increase in agricultural output 
A) An increase in business taxes 
B) An increase in gasoline taxes 
C) An increase in the cost of raw materials 
D) An increase in the amount and cost of government regulation 
E) An increase in agricultural output

Question 10

Consider schedule #1 in the aggregate demand and aggregate supply table given below.The equilibrium output and price level for the economy described on this schedule are:
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Table 10.1
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$$\begin{array} { c c c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { Aggregate Output } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { Level }
\end{array} &\#1& \begin{array} { c } 
\text { Quantity of } \
\text { Aggregate Output Supplied } \
\# 2
\end{array} & \# 3 \
\hline \$ 7.0 & 110 & \$ 5.0 & \$ 6.0 & \$ 4.0 \
6.5 & 120 & 5.5 & 6.5 & 4.5 \
6.0 & 130 & 6.0 & 7.0 & 5.0 \
5.5 & 140 & 6.5 & 7.5 & 5.5 \
5.0 & 150 & 7.0 & 8.0 & 6.0
\end{array}$$
?

Accepted Answer

A) $7.0 and 110,respectively. 
B) $6.5 and 120,respectively. 
C) $6.0 and 130,respectively. 
D) $5.5 and 140,respectively. 
E) $5.0 and 150,respectively. 
A) $7.0 and 110,respectively. 
B) $6.5 and 120,respectively. 
C) $6.0 and 130,respectively. 
D) $5.5 and 140,respectively. 
E) $5.0 and 150,respectively.

The figure given below depicts long run equilibrium in an aggregate demand-aggregate supply model.Which of the following is indicated by the arrow given in this figure?

The figure below shows the short-run aggregate supply curve of an economy.In this figure,a recessionary gap would be represented by the distance between:

If resource prices are flexible,the long-run aggregate supply curve is vertical.

Which of the following is generally true of nominal wages?

The main effect of an increase in capital stock is a(n):

Suppose the price level increases by 5 percent and the nominal wages of workers increase by 3 percent during a particular year.This implies that the real wage has:

An increase in the federal minimum wage will shift the long-run aggregate supply curve to the left.

An expansionary gap generally creates inflationary pressure in an economy.

Which of the following supply shocks will shift the long-run aggregate supply curve outward?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 10: Aggregate Supply

The figure given below depicts long run equilibrium in an aggregate demand-aggregate supply model.Which of the following is indicated by the arrow given in this figure?

The figure below shows the short-run aggregate supply curve of an economy.In this figure,a recessionary gap would be represented by the distance between:

If resource prices are flexible,the long-run aggregate supply curve is vertical.

Which of the following is generally true of nominal wages?

The main effect of an increase in capital stock is a(n):

Suppose the price level increases by 5 percent and the nominal wages of workers increase by 3 percent during a particular year.This implies that the real wage has:

An increase in the federal minimum wage will shift the long-run aggregate supply curve to the left.

An expansionary gap generally creates inflationary pressure in an economy.

Which of the following supply shocks will shift the long-run aggregate supply curve outward?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters