Question 1

From 2006 to 2008 there was a dramatic fall in the price of houses.If this fall made people feel less wealthy,then it would have shifted

Accepted Answer

A)  aggregate demand right. 
B)  aggregate demand left. 
C)  aggregate supply right. 
D)  aggregate supply left. 
A)  aggregate demand right. 
B)  aggregate demand left. 
C)  aggregate supply right. 
D)  aggregate supply left.

Question 2

The aggregate demand and aggregate supply graph has the

Accepted Answer

A)  quantity of output on the horizontal axis.Output is best measured by real GDP. 
B)  quantity of output on the horizontal axis.Output is best measured by nominal GDP. 
C)  quantity of output on the vertical axis.Output is best measured by real GDP. 
D)  quantity of output on the vertical axis.Output is best measured by nominal GDP. 
A)  quantity of output on the horizontal axis.Output is best measured by real GDP. 
B)  quantity of output on the horizontal axis.Output is best measured by nominal GDP. 
C)  quantity of output on the vertical axis.Output is best measured by real GDP. 
D)  quantity of output on the vertical axis.Output is best measured by nominal GDP.

Question 3

The quantity of money has no real impact on things people really care about like whether or not they have a job.Most economists would agree that this statement is appropriate concerning

Accepted Answer

A)  both the short run and the long run. 
B)  the short run,but not the long run. 
C)  the long run,but not the short run. 
D)  neither the long run nor the short run. 
A)  both the short run and the long run. 
B)  the short run,but not the long run. 
C)  the long run,but not the short run. 
D)  neither the long run nor the short run.

Question 4

The long-run aggregate supply curve shifts right if

Accepted Answer

A)  immigration from abroad increases. 
B)  the capital stock increases. 
C)  technology advances. 
D)  All of the above are correct. 
A)  immigration from abroad increases. 
B)  the capital stock increases. 
C)  technology advances. 
D)  All of the above are correct.

Question 5

Which of the following shifts aggregate demand to the right?

Accepted Answer

A)  a decrease in the money supply 
B)  increases in the profitability of capital due perhaps to technological progress. 
C)  the repeal of an investment tax credit 
D)  a decrease in the price level 
A)  a decrease in the money supply 
B)  increases in the profitability of capital due perhaps to technological progress. 
C)  the repeal of an investment tax credit 
D)  a decrease in the price level

Question 6

The primary purpose of the aggregate demand and aggregate supply model is to demonstrate the classical dichotomy.

Accepted Answer

A) True 
 B)False

Question 7

When the price level falls

Accepted Answer

A)  people want to hold less money. 
B)  the interest rate falls. 
C)  investment spending rises. 
D)  All of the above are correct. 
A)  people want to hold less money. 
B)  the interest rate falls. 
C)  investment spending rises. 
D)  All of the above are correct.

Question 8

Which of the following,other things the same,would make the price level decrease and real GDP increase?

Accepted Answer

A)  long-run aggregate supply shifts right 
B)  long-run aggregate supply shifts left 
C)  aggregate demand shifts right 
D)  aggregate demand shifts left 
A)  long-run aggregate supply shifts right 
B)  long-run aggregate supply shifts left 
C)  aggregate demand shifts right 
D)  aggregate demand shifts left

Question 9

When the money supply decreases

Accepted Answer

A)  interest rates fall and so aggregate demand shifts right. 
B)  interest rates fall and so aggregate demand shifts left. 
C)  interest rates rise and so aggregate demand shifts right. 
D)  interest rates rise and so aggregate demand shifts left. 
A)  interest rates fall and so aggregate demand shifts right. 
B)  interest rates fall and so aggregate demand shifts left. 
C)  interest rates rise and so aggregate demand shifts right. 
D)  interest rates rise and so aggregate demand shifts left.

Question 10

Which of the following shifts short-run aggregate supply left?

Accepted Answer

A)  an increase in the actual price level 
B)  an increase in the expected price level 
C)  an increase in the capital stock 
D)  None of the above is correct. 
A)  an increase in the actual price level 
B)  an increase in the expected price level 
C)  an increase in the capital stock 
D)  None of the above is correct.

Question 11

Increased output and prices in the United States in the early 1940s were mostly the result of increased government expenditures.

Accepted Answer

A) True 
 B)False

Question 12

As the price level falls

Accepted Answer

A)  people will want to hold more money,so the interest rate rises. 
B)  people will want to hold more money,so the interest rate falls. 
C)  people will want to hold less money,so the interest rate falls. 
D)  people will want to hold less money,so the interest rate rises. 
A)  people will want to hold more money,so the interest rate rises. 
B)  people will want to hold more money,so the interest rate falls. 
C)  people will want to hold less money,so the interest rate falls. 
D)  people will want to hold less money,so the interest rate rises.

Question 13

The position of the long-run aggregate supply curve

Accepted Answer

A)  is determined by the things that determine output in the classical model. 
B)  is at the point where the unemployment rate is zero. 
C)  shifts to the right when the price level increases. 
D)  is at the point where the economy would cease to grow. 
A)  is determined by the things that determine output in the classical model. 
B)  is at the point where the unemployment rate is zero. 
C)  shifts to the right when the price level increases. 
D)  is at the point where the economy would cease to grow.

Question 14

Which of the following accounts for about two-thirds of the decline in output during a recession?

Accepted Answer

A)  the decline in consumption expenditures on consumer durables alone 
B)  the decline in total consumption spending alone 
C)  the decline in investment spending alone 
D)  the combined decline in consumption and investment spending 
A)  the decline in consumption expenditures on consumer durables alone 
B)  the decline in total consumption spending alone 
C)  the decline in investment spending alone 
D)  the combined decline in consumption and investment spending

Question 15

Which of the following shifts the short-run aggregate supply curve to the right?

Accepted Answer

A)  a decrease in the actual price level 
B)  an increase in the actual price level 
C)  a decrease in the expected price level 
D)  an increase in the expected price level 
A)  a decrease in the actual price level 
B)  an increase in the actual price level 
C)  a decrease in the expected price level 
D)  an increase in the expected price level

Question 16

Suppose a shift in aggregate demand creates an economic contraction.If policymakers can respond with sufficient speed and precision,they can offset the initial shift by shifting

Accepted Answer

A)  aggregate supply right. 
B)  aggregate supply left. 
C)  aggregate demand right. 
D)  aggregate demand left. 
A)  aggregate supply right. 
B)  aggregate supply left. 
C)  aggregate demand right. 
D)  aggregate demand left.

Question 17

As the price level falls

Accepted Answer

A)  people will want to buy more bonds,so the interest rate rises. 
B)  people will want to buy fewer bonds,so the interest rate falls. 
C)  people will want to buy more bonds,so the interest rate falls. 
D)  people will want to buy fewer bonds,so the interest rate rises. 
A)  people will want to buy more bonds,so the interest rate rises. 
B)  people will want to buy fewer bonds,so the interest rate falls. 
C)  people will want to buy more bonds,so the interest rate falls. 
D)  people will want to buy fewer bonds,so the interest rate rises.

Question 18

Which of the following is correct?

Accepted Answer

A)  Over the business cycle consumption fluctuates more than investment. 
B)  Economic fluctuations are easy to predict. 
C)  During recessions sales and profits tend to fall. 
D)  Because of government policy the U.S.has suffered no recessions in the last 25 years. 
A)  Over the business cycle consumption fluctuates more than investment. 
B)  Economic fluctuations are easy to predict. 
C)  During recessions sales and profits tend to fall. 
D)  Because of government policy the U.S.has suffered no recessions in the last 25 years.

Question 19

Refer to U.S.Financial Crisis.U.S.net exports would

Accepted Answer

A)  rise which by itself would increase aggregate demand. 
B)  rise which by itself would decrease aggregate demand. 
C)  fall which by itself would increase aggregate demand. 
D)  fall which by itself would decrease aggregate demand. 
A)  rise which by itself would increase aggregate demand. 
B)  rise which by itself would decrease aggregate demand. 
C)  fall which by itself would increase aggregate demand. 
D)  fall which by itself would decrease aggregate demand.

Question 20

Which of the following shifts aggregate demand right?

Accepted Answer

A)  both a decrease in the price level and the implementation of an investment tax credit 
B)  a decrease in the price level but not the implementation of an investment tax credit 
C)  the implementation of an investment tax credit but not a decrease in the price level 
D)  neither a decrease in the price level nor the implementation of an investment tax credit 
A)  both a decrease in the price level and the implementation of an investment tax credit 
B)  a decrease in the price level but not the implementation of an investment tax credit 
C)  the implementation of an investment tax credit but not a decrease in the price level 
D)  neither a decrease in the price level nor the implementation of an investment tax credit

Exam 33: Aggregate Demand and Aggregate Supply

From 2006 to 2008 there was a dramatic fall in the price of houses.If this fall made people feel less wealthy,then it would have shifted

The aggregate demand and aggregate supply graph has the

The quantity of money has no real impact on things people really care about like whether or not they have a job.Most economists would agree that this statement is appropriate concerning

The long-run aggregate supply curve shifts right if

Which of the following shifts aggregate demand to the right?

The primary purpose of the aggregate demand and aggregate supply model is to demonstrate the classical dichotomy.

When the price level falls

Which of the following,other things the same,would make the price level decrease and real GDP increase?

When the money supply decreases

Which of the following shifts short-run aggregate supply left?

Increased output and prices in the United States in the early 1940s were mostly the result of increased government expenditures.

As the price level falls

The position of the long-run aggregate supply curve

Which of the following accounts for about two-thirds of the decline in output during a recession?

Which of the following shifts the short-run aggregate supply curve to the right?

Suppose a shift in aggregate demand creates an economic contraction.If policymakers can respond with sufficient speed and precision,they can offset the initial shift by shifting

As the price level falls

Which of the following is correct?

Refer to U.S.Financial Crisis.U.S.net exports would

Which of the following shifts aggregate demand right?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply,demand,and Government Policies

Consumers,producers,and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Market for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving,investment,and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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