Question 1

When the dollar depreciates,U.S.

Accepted Answer

A)  exports and imports increase. 
B)  exports increase,while imports decrease. 
C)  exports decrease,while imports increase. 
D)  exports and imports decrease. 
A)  exports and imports increase. 
B)  exports increase,while imports decrease. 
C)  exports decrease,while imports increase. 
D)  exports and imports decrease.

Question 2

When output rises,unemployment falls.

Accepted Answer

A) True 
 B)False

Question 3

Other things the same,when the government spends more,the initial effect is that

Accepted Answer

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

Question 4

If the central bank increased the money supply in response to a decrease in short-run aggregate supply,unemployment would return towards its natural rate,but prices would rise even more.

Accepted Answer

A) True 
 B)False

Question 5

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Accepted Answer

A) True 
 B)False

Question 6

If the economy is initially at long-run equilibrium and aggregate demand declines,then in the long run the price level

Accepted Answer

A)  and output are higher than in the original long-run equilibrium. 
B)  and output are lower than in the original long-run equilibrium. 
C)  is lower and output is the same as the original long-run equilibrium. 
D)  is the same and output is lower than in the original long-run equilibrium. 
A)  and output are higher than in the original long-run equilibrium. 
B)  and output are lower than in the original long-run equilibrium. 
C)  is lower and output is the same as the original long-run equilibrium. 
D)  is the same and output is lower than in the original long-run equilibrium.

Question 7

Other things the same,when the price level rises more than expected,some firms will have

Accepted Answer

A)  higher than desired prices which increases their sales. 
B)  higher than desired prices which depresses their sales. 
C)  lower than desired prices which increases their sales. 
D)  lower than desired prices which depresses their sales. 
A)  higher than desired prices which increases their sales. 
B)  higher than desired prices which depresses their sales. 
C)  lower than desired prices which increases their sales. 
D)  lower than desired prices which depresses their sales.

Question 8

Stagflation exists when prices

Accepted Answer

A)  and output rise. 
B)  rise and output falls. 
C)  fall and output rises. 
D)  and output fall. 
A)  and output rise. 
B)  rise and output falls. 
C)  fall and output rises. 
D)  and output fall.

Question 9

Figure 20-2.  
-Refer to Stock Market Boom 2015.In the long run,the change in price expectations created by the stock market boom shifts

Accepted Answer

A)  long-run aggregate supply right. 
B)  long-run aggregate supply left. 
C)  short-run aggregate supply right. 
D)  short-run aggregate supply left. 
A)  long-run aggregate supply right. 
B)  long-run aggregate supply left. 
C)  short-run aggregate supply right. 
D)  short-run aggregate supply left.

Question 10

Which of the following rises when the U.S.price level falls?

Accepted Answer

A)  interest rates 
B)  the value of the dollar in the market for foreign-currency exchange 
C)  real wealth 
D)  All of the above are correct. 
A)  interest rates 
B)  the value of the dollar in the market for foreign-currency exchange 
C)  real wealth 
D)  All of the above are correct.

Question 11

The short-run effects of an increase in the expected price level include

Accepted Answer

A)  a lower level of output and a lower price level. 
B)  a lower level of output and a higher price level. 
C)  a higher level of output and a lower price level. 
D)  a higher level of output and a higher price level. 
A)  a lower level of output and a lower price level. 
B)  a lower level of output and a higher price level. 
C)  a higher level of output and a lower price level. 
D)  a higher level of output and a higher price level.

Question 12

When the price level increases,the real value of people's money holdings

Accepted Answer

A)  falls,so they buy more. 
B)  falls,so they buy less. 
C)  rises,so they buy more. 
D)  rises,so they buy less. 
A)  falls,so they buy more. 
B)  falls,so they buy less. 
C)  rises,so they buy more. 
D)  rises,so they buy less.

Question 13

If aggregate demand shifts left,then in the short run

Accepted Answer

A)  the price level and real GDP both rise. 
B)  the price level rises and real GDP falls. 
C)  the price level falls and real GDP rises. 
D)  the price and real GDP both fall. 
A)  the price level and real GDP both rise. 
B)  the price level rises and real GDP falls. 
C)  the price level falls and real GDP rises. 
D)  the price and real GDP both fall.

Question 14

A decrease in what variable will raise the quantity of goods and services supplied,and shift only the short run aggregate supply curve to the right?

Accepted Answer

The expect

Question 15

Which of the following lists includes only changes that shift aggregate demand to the right?

Accepted Answer

A)  repeal of an investment tax credit,an increase in the money supply 
B)  repeal of an investment tax credit,a decrease in the money supply 
C)  passing of an investment tax credit,an increase in the money supply 
D)  passing of an investment tax credit,a decrease in the money supply 
A)  repeal of an investment tax credit,an increase in the money supply 
B)  repeal of an investment tax credit,a decrease in the money supply 
C)  passing of an investment tax credit,an increase in the money supply 
D)  passing of an investment tax credit,a decrease in the money supply

Question 16

Other things the same,as the price level falls,

Accepted Answer

A)  the money supply falls. 
B)  interest rates rise. 
C)  a dollar buys more domestic goods. 
D)  the aggregate-demand curve shifts right. 
A)  the money supply falls. 
B)  interest rates rise. 
C)  a dollar buys more domestic goods. 
D)  the aggregate-demand curve shifts right.

Question 17

Figure 20-2.  
-Refer to Figure 20-2.Starting from point B and assuming that aggregate demand is held constant,in the long run the economy is likely to experience

Accepted Answer

A)  a falling price level and a falling level of output. 
B)  a falling price level and a rising level of output. 
C)  a rising price level and a falling level of output. 
D)  a rising price level and a rising level of output. 
A)  a falling price level and a falling level of output. 
B)  a falling price level and a rising level of output. 
C)  a rising price level and a falling level of output. 
D)  a rising price level and a rising level of output.

Question 18

The aggregate-demand curve

Accepted Answer

A)  has a slope that is explained in the same way as the slope of the demand curve for a particular product. 
B)  is vertical in the long run. 
C)  shows an inverse relation between the price level and the quantity of all goods and services demanded. 
D)  All of the above are correct. 
A)  has a slope that is explained in the same way as the slope of the demand curve for a particular product. 
B)  is vertical in the long run. 
C)  shows an inverse relation between the price level and the quantity of all goods and services demanded. 
D)  All of the above are correct.

Question 19

The long-run aggregate supply curve shifts right if

Accepted Answer

A)  technology improves. 
B)  the price level decreases. 
C)  the money supply increases. 
D)  All of the above are correct. 
A)  technology improves. 
B)  the price level decreases. 
C)  the money supply increases. 
D)  All of the above are correct.

Question 20

Which of the following would increase output in the short run?

Accepted Answer

A)  an increase in stock prices makes people feel wealthier 
B)  government spending increases 
C)  firms chose to purchase more investment goods 
D)  All of the above are correct. 
A)  an increase in stock prices makes people feel wealthier 
B)  government spending increases 
C)  firms chose to purchase more investment goods 
D)  All of the above are correct.

Exam 33: Aggregate Demand and Aggregate Supply

When the dollar depreciates,U.S.

When output rises,unemployment falls.

Other things the same,when the government spends more,the initial effect is that

If the central bank increased the money supply in response to a decrease in short-run aggregate supply,unemployment would return towards its natural rate,but prices would rise even more.

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

If the economy is initially at long-run equilibrium and aggregate demand declines,then in the long run the price level

Other things the same,when the price level rises more than expected,some firms will have

Stagflation exists when prices

Figure 20-2. -Refer to Stock Market Boom 2015.In the long run,the change in price expectations created by the stock market boom shifts

Which of the following rises when the U.S.price level falls?

The short-run effects of an increase in the expected price level include

When the price level increases,the real value of people's money holdings

If aggregate demand shifts left,then in the short run

A decrease in what variable will raise the quantity of goods and services supplied,and shift only the short run aggregate supply curve to the right?

Which of the following lists includes only changes that shift aggregate demand to the right?

Other things the same,as the price level falls,

Figure 20-2. -Refer to Figure 20-2.Starting from point B and assuming that aggregate demand is held constant,in the long run the economy is likely to experience

The aggregate-demand curve

The long-run aggregate supply curve shifts right if

Which of the following would increase output in the short run?

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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