Question 1

The model of short-run economic fluctuations focuses on the price level and

Accepted Answer

A)  real GDP. 
B)  economic growth. 
C)  the neutrality of money. 
D)  None of the above is correct. 
A)  real GDP. 
B)  economic growth. 
C)  the neutrality of money. 
D)  None of the above is correct.

Question 2

If speculators lost confidence in foreign economies and so wanted to buy more U.S.bonds

Accepted Answer

A)  the dollar would appreciate which would cause aggregate demand to shift right. 
B)  the dollar would appreciate which would cause aggregate demand to shift left. 
C)  the dollar would depreciate which would cause aggregate demand to shift right. 
D)  the dollar would depreciate which would cause aggregate demand to shift left. 
A)  the dollar would appreciate which would cause aggregate demand to shift right. 
B)  the dollar would appreciate which would cause aggregate demand to shift left. 
C)  the dollar would depreciate which would cause aggregate demand to shift right. 
D)  the dollar would depreciate which would cause aggregate demand to shift left.

Question 3

Historically,as recessions have ended the unemployment rate declined

Accepted Answer

A)  gradually to near zero. 
B)  rapidly to near zero. 
C)  gradually to a rate of about 5%-6%. 
D)  rapidly to a rate of about 5%-6%. 
A)  gradually to near zero. 
B)  rapidly to near zero. 
C)  gradually to a rate of about 5%-6%. 
D)  rapidly to a rate of about 5%-6%.

Question 4

The recession of 2008-2009 was in many ways the worst macroeconomic event in more than half a century.

Accepted Answer

A) True 
 B)False

Question 5

Other things the same,a decrease in the price level motivates people to hold

Accepted Answer

A)  less money,so they lend less,and the interest rate rises. 
B)  less money,so they lend more,and the interest rate falls. 
C)  more money,so they lend more,and the interest rate rises. 
D)  more money,so they lend less,and the interest rate falls. 
A)  less money,so they lend less,and the interest rate rises. 
B)  less money,so they lend more,and the interest rate falls. 
C)  more money,so they lend more,and the interest rate rises. 
D)  more money,so they lend less,and the interest rate falls.

Question 6

Which of the following is included in the aggregate demand for goods and services?

Accepted Answer

A)  consumption demand 
B)  investment demand 
C)  net exports 
D)  All of the above are correct. 
A)  consumption demand 
B)  investment demand 
C)  net exports 
D)  All of the above are correct.

Question 7

The long-run aggregate supply curve shifts right if

Accepted Answer

A)  the price level rises. 
B)  the price level falls. 
C)  the capital stock increases. 
D)  the capital stock decreases. 
A)  the price level rises. 
B)  the price level falls. 
C)  the capital stock increases. 
D)  the capital stock decreases.

Question 8

Other things the same,if the price level rises,then domestic interest rates

Accepted Answer

A)  rise,so domestic residents will want to hold more foreign bonds. 
B)  rise,so domestic residents will want to hold fewer foreign bonds. 
C)  fall,so domestic residents will want to hold more foreign bonds. 
D)  fall,so domestic residents will want to hold fewer foreign bonds. 
A)  rise,so domestic residents will want to hold more foreign bonds. 
B)  rise,so domestic residents will want to hold fewer foreign bonds. 
C)  fall,so domestic residents will want to hold more foreign bonds. 
D)  fall,so domestic residents will want to hold fewer foreign bonds.

Question 9

When the price level rises more than expected,a firm with a sticky price will sell its output at a price that is

Accepted Answer

A)  less than it desires and increase its production 
B)  less than it desires and decrease its production . 
C)  more than it desires and increase its production. 
D)  less than it desires and decrease its production. 
A)  less than it desires and increase its production 
B)  less than it desires and decrease its production . 
C)  more than it desires and increase its production. 
D)  less than it desires and decrease its production.

Question 10

Aggregate demand includes

Accepted Answer

A)  only the quantity of goods and services households want to buy. 
B)  only the quantity of goods and services households and firms want to buy. 
C)  only the quantity of goods and services households,firms,and the government want to buy. 
D)  the quantity of goods and services households,firms,the government,and customer abroad want to buy. 
A)  only the quantity of goods and services households want to buy. 
B)  only the quantity of goods and services households and firms want to buy. 
C)  only the quantity of goods and services households,firms,and the government want to buy. 
D)  the quantity of goods and services households,firms,the government,and customer abroad want to buy.

Question 11

The long-run aggregate supply curve

Accepted Answer

A)  is vertical. 
B)  is a graphical representation of the classical dichotomy. 
C)  indicates monetary neutrality in the long run. 
D)  All of the above are correct. 
A)  is vertical. 
B)  is a graphical representation of the classical dichotomy. 
C)  indicates monetary neutrality in the long run. 
D)  All of the above are correct.

Question 12

Which of the following shifts aggregate demand to the left?

Accepted Answer

A)  an increase in the price level 
B)  a decrease in the money supply 
C)  an increase in net exports 
D)  Congress passes a new investment tax credit 
A)  an increase in the price level 
B)  a decrease in the money supply 
C)  an increase in net exports 
D)  Congress passes a new investment tax credit

Question 13

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Accepted Answer

A) True 
 B)False

Question 14

The classical dichotomy refers to the separation of

Accepted Answer

A)  variables that move with the business cycle and variables that do not. 
B)  changes in money and changes in government expenditures. 
C)  decisions made by the public and decisions made by the government. 
D)  real and nominal variables. 
A)  variables that move with the business cycle and variables that do not. 
B)  changes in money and changes in government expenditures. 
C)  decisions made by the public and decisions made by the government. 
D)  real and nominal variables.

Question 15

Most economists believe that in the short run

Accepted Answer

A)  real and nominal variables are determined independently and that money cannot move real GDP away from its long-run trend. 
B)  real and nominal variables are determined independently but that money can temporarily move real GDP away from its long-run trend. 
C)  real and nominal variables are highly intertwined but that money cannot move real GDP away from its long-run trend. 
D)  real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its long-run trend. 
A)  real and nominal variables are determined independently and that money cannot move real GDP away from its long-run trend. 
B)  real and nominal variables are determined independently but that money can temporarily move real GDP away from its long-run trend. 
C)  real and nominal variables are highly intertwined but that money cannot move real GDP away from its long-run trend. 
D)  real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its long-run trend.

Question 16

Other things the same,continued technological progress and continued increases in the money supply would unambiguously lead to

Accepted Answer

A)  rising prices only. 
B)  rising real GDP only. 
C)  rising prices and rising real GDP. 
D)  neither rising prices nor rising real GDP. 
A)  rising prices only. 
B)  rising real GDP only. 
C)  rising prices and rising real GDP. 
D)  neither rising prices nor rising real GDP.

Question 17

Since the end of World War II,the U.S.has almost always had rising prices and an upward trend in real GDP.To explain this

Accepted Answer

A)  it is only necessary that long-run aggregate supply shifts right over time. 
B)  it is only necessary that aggregate demand shifts right over time. 
C)  both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther. 
D)  None of the above cases would produce rising prices and growing real GDP over time. 
A)  it is only necessary that long-run aggregate supply shifts right over time. 
B)  it is only necessary that aggregate demand shifts right over time. 
C)  both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther. 
D)  None of the above cases would produce rising prices and growing real GDP over time.

Question 18

Illustrate the classical analysis of growth and inflation with aggregate demand and long-run aggregate supply curves.

Accepted Answer

See graph. @#IMG-DLM& Over time,technological adva

Question 19

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

Accepted Answer

The aggreg

Question 20

Other things the same,as the price level rises,the real value of money

Accepted Answer

A)  and the exchange rate rise. 
B)  and the exchange rate fall. 
C)  rises and the exchange rate falls. 
D)  falls and the exchange rate rises. 
A)  and the exchange rate rise. 
B)  and the exchange rate fall. 
C)  rises and the exchange rate falls. 
D)  falls and the exchange rate rises.

Exam 33: Aggregate Demand and Aggregate Supply

The model of short-run economic fluctuations focuses on the price level and

If speculators lost confidence in foreign economies and so wanted to buy more U.S.bonds

Historically,as recessions have ended the unemployment rate declined

The recession of 2008-2009 was in many ways the worst macroeconomic event in more than half a century.

Other things the same,a decrease in the price level motivates people to hold

Which of the following is included in the aggregate demand for goods and services?

The long-run aggregate supply curve shifts right if

Other things the same,if the price level rises,then domestic interest rates

When the price level rises more than expected,a firm with a sticky price will sell its output at a price that is

Aggregate demand includes

The long-run aggregate supply curve

Which of the following shifts aggregate demand to the left?

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

The classical dichotomy refers to the separation of

Most economists believe that in the short run

Other things the same,continued technological progress and continued increases in the money supply would unambiguously lead to

Since the end of World War II,the U.S.has almost always had rising prices and an upward trend in real GDP.To explain this

Illustrate the classical analysis of growth and inflation with aggregate demand and long-run aggregate supply curves.

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

Other things the same,as the price level rises,the real value of money

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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