Question 1

When the price level falls the quantity of

Accepted Answer

A)  consumption goods demanded rises,while the quantity of net exports demanded falls. 
B)  consumption goods demanded and the quantity of net exports demanded both rise. 
C)  consumption goods demanded and the quantity of net exports demanded both fall. 
D)  consumption goods demanded falls,while the quantity of net exports demand rises. 
A)  consumption goods demanded rises,while the quantity of net exports demanded falls. 
B)  consumption goods demanded and the quantity of net exports demanded both rise. 
C)  consumption goods demanded and the quantity of net exports demanded both fall. 
D)  consumption goods demanded falls,while the quantity of net exports demand rises.

Question 2

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

Accepted Answer

A)  relative to prices wages are higher and employment rise. 
B)  relative to prices wages are higher and employment falls. 
C)  relative to prices wages are lower and employment rises. 
D)  relative to prices wages are lower and employment falls. 
A)  relative to prices wages are higher and employment rise. 
B)  relative to prices wages are higher and employment falls. 
C)  relative to prices wages are lower and employment rises. 
D)  relative to prices wages are lower and employment falls.

Question 3

Other things the same,as the price level falls,a country's exchange rate

Accepted Answer

A)  and interest rates rise. 
B)  and interest rates fall. 
C)  falls and interest rates rise. 
D)  rises and interest rates fall. 
A)  and interest rates rise. 
B)  and interest rates fall. 
C)  falls and interest rates rise. 
D)  rises and interest rates fall.

Question 4

The recessions associated with the business cycle come at regular intervals.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would cause stagflation?

Accepted Answer

A)  rising government expenditures 
B)  rising oil prices 
C)  a falling money supply 
D)  technical progress 
A)  rising government expenditures 
B)  rising oil prices 
C)  a falling money supply 
D)  technical progress

Question 6

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

Accepted Answer

A)  both an increase in the capital stock and technological improvements. 
B)  an increase in the capital stock but not technological improvements 
C)  an increase in the capital stock but not technological improvements . 
D)  neither an increase in the capital stock nor an technological improvements 
A)  both an increase in the capital stock and technological improvements. 
B)  an increase in the capital stock but not technological improvements 
C)  an increase in the capital stock but not technological improvements . 
D)  neither an increase in the capital stock nor an technological improvements

Question 7

Figure 20-2.  
-Refer to Figure 20-2.The appearance of the long-run aggregate-supply (LRAS)curve

Accepted Answer

A)  is inconsistent with the concept of monetary neutrality. 
B)  is consistent with the idea that point A represents a long-run equilibrium but not a short-run equilibrium when the relevant short-run aggregate-supply curve is AS1. 
C)  indicates that Y1 is the natural rate of output. 
D)  All of the above are correct. 
A)  is inconsistent with the concept of monetary neutrality. 
B)  is consistent with the idea that point A represents a long-run equilibrium but not a short-run equilibrium when the relevant short-run aggregate-supply curve is AS1. 
C)  indicates that Y1 is the natural rate of output. 
D)  All of the above are correct.

Question 8

The recession of 2008-2009 was associated with a fall in housing prices which shifted aggregate demand to the left.

Accepted Answer

A) True 
 B)False

Question 9

Suppose a boom in stock market prices helps make people feel wealthier.Using the model of aggregate demand and aggregate supply,identify the curves that are affected,and which way these curves would shift.

Accepted Answer

The aggregate demand

Question 10

Which of the following rises during recessions?

Accepted Answer

A)  layoffs and consumer spending 
B)  layoffs but not consumer spending 
C)  consumer spending but not layoffs 
D)  neither layoffs nor consumer spending 
A)  layoffs and consumer spending 
B)  layoffs but not consumer spending 
C)  consumer spending but not layoffs 
D)  neither layoffs nor consumer spending

Question 11

Which of the following would cause prices to fall and output to rise in the short run?

Accepted Answer

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

Question 12

An increase in the money supply causes output to rise in the long run.

Accepted Answer

A) True 
 B)False

Question 13

Figure 20-2.  
-Refer to Stock Market Boom 2015.In the short run what happens to the price level and real GDP?

Accepted Answer

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

Question 14

Changes in the price of oil

Accepted Answer

A)  can only lead to recessions. 
B)  have not contributed much to output fluctuations in the United States. 
C)  change the economy principally by changing aggregate demand. 
D)  created both inflation and recession in the United States in the 1970s. 
A)  can only lead to recessions. 
B)  have not contributed much to output fluctuations in the United States. 
C)  change the economy principally by changing aggregate demand. 
D)  created both inflation and recession in the United States in the 1970s.

Question 15

Other things the same,if the U.S.price level falls,then

Accepted Answer

A)  U.S.residents want to buy more foreign bonds.The real exchange rate rises. 
B)  U.S.residents want to buy more foreign bonds.The real exchange rate falls. 
C)  U.S.residents want to buy fewer foreign bonds.The real exchange rate rises. 
D)  U.S.residents want to buy fewer foreign bonds.The real exchange rate falls. 
A)  U.S.residents want to buy more foreign bonds.The real exchange rate rises. 
B)  U.S.residents want to buy more foreign bonds.The real exchange rate falls. 
C)  U.S.residents want to buy fewer foreign bonds.The real exchange rate rises. 
D)  U.S.residents want to buy fewer foreign bonds.The real exchange rate falls.

Question 16

The Central Bank of Wiknam increases the money supply at the same time the Parliament of Wiknam passes a new investment tax credit.Which of these policies shift aggregate demand to the right?

Accepted Answer

A)  both the money supply increase and the investment tax credit 
B)  the money supply increase but not the investment tax credit 
C)  the investment tax credit but not the money supply increase 
D)  neither the investment tax credit nor the money supply increase 
A)  both the money supply increase and the investment tax credit 
B)  the money supply increase but not the investment tax credit 
C)  the investment tax credit but not the money supply increase 
D)  neither the investment tax credit nor the money supply increase

Question 17

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Accepted Answer

A)  The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. 
B)  The price level and quantity of output adjust to bring aggregate demand and supply into balance. 
C)  The aggregate supply curve shows the quantity of goods and services that households,firms,and the government want to buy at each price. 
D)  All of the above are correct. 
A)  The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. 
B)  The price level and quantity of output adjust to bring aggregate demand and supply into balance. 
C)  The aggregate supply curve shows the quantity of goods and services that households,firms,and the government want to buy at each price. 
D)  All of the above are correct.

Question 18

Figure 33-1.  
-Refer to Figure 33-1.If the economy starts at Y,then a recession occurs at

Accepted Answer

A)  V. 
B)  W. 
C)  X. 
D)  Z. 
A)  V. 
B)  W. 
C)  X. 
D)  Z.

Question 19

According to classical macroeconomic theory,changes in the money supply change nominal but not real variables.

Accepted Answer

A) True 
 B)False

Question 20

The aggregate quantity of goods and services demanded changes as the price level rises because

Accepted Answer

A)  real wealth falls,interest rates rise,and the dollar appreciates. 
B)  real wealth falls,interest rates rise,and the dollar depreciates. 
C)  real wealth rises,interest rates fall,and the dollar appreciates. 
D)  real wealth rises,interest rates fall,and the dollar depreciates. 
A)  real wealth falls,interest rates rise,and the dollar appreciates. 
B)  real wealth falls,interest rates rise,and the dollar depreciates. 
C)  real wealth rises,interest rates fall,and the dollar appreciates. 
D)  real wealth rises,interest rates fall,and the dollar depreciates.

Exam 33: Aggregate Demand and Aggregate Supply

When the price level falls the quantity of

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

Other things the same,as the price level falls,a country's exchange rate

The recessions associated with the business cycle come at regular intervals.

Which of the following would cause stagflation?

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

Figure 20-2. -Refer to Figure 20-2.The appearance of the long-run aggregate-supply (LRAS)curve

The recession of 2008-2009 was associated with a fall in housing prices which shifted aggregate demand to the left.

Suppose a boom in stock market prices helps make people feel wealthier.Using the model of aggregate demand and aggregate supply,identify the curves that are affected,and which way these curves would shift.

Which of the following rises during recessions?

Which of the following would cause prices to fall and output to rise in the short run?

An increase in the money supply causes output to rise in the long run.

Figure 20-2. -Refer to Stock Market Boom 2015.In the short run what happens to the price level and real GDP?

Changes in the price of oil

Other things the same,if the U.S.price level falls,then

The Central Bank of Wiknam increases the money supply at the same time the Parliament of Wiknam passes a new investment tax credit.Which of these policies shift aggregate demand to the right?

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Figure 33-1. -Refer to Figure 33-1.If the economy starts at Y,then a recession occurs at

According to classical macroeconomic theory,changes in the money supply change nominal but not real variables.

The aggregate quantity of goods and services demanded changes as the price level rises because

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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