Question 1

An increase in the price level --------------------the aggregate quantity supplied and -------------------- the aggregate quantity demanded.

Accepted Answer

A) decreases; decreases 
B) increases; decreases 
C) decreases; increases 
D) does not change; decreases 
E) increases; increases 
A) decreases; decreases 
B) increases; decreases 
C) decreases; increases 
D) does not change; decreases 
E) increases; increases

Question 2

Which of the following shifts the aggregate demand curve rightward?

Accepted Answer

A) a decrease in the quantity of money 
B) a decrease in expected future income 
C) a decrease in government expenditures on goods and services 
D) a tax cut 
E) a decrease in the price level 
A) a decrease in the quantity of money 
B) a decrease in expected future income 
C) a decrease in government expenditures on goods and services 
D) a tax cut 
E) a decrease in the price level

Question 3

Real GDP definitely increases if

Accepted Answer

A) potential GDP decreases so that real GDP exceeds potential GDP. 
B) the AS curve shifts leftward and the AD curve does not shift. 
C) both the AD curve and the AS curve shift rightward. 
D) the AD curve shifts leftward and the AS curve shifts rightward. 
E) both the AD curve and AS curve shift leftward. 
A) potential GDP decreases so that real GDP exceeds potential GDP. 
B) the AS curve shifts leftward and the AD curve does not shift. 
C) both the AD curve and the AS curve shift rightward. 
D) the AD curve shifts leftward and the AS curve shifts rightward. 
E) both the AD curve and AS curve shift leftward.

Question 4

The change reflected in the above figure might be a result of

Accepted Answer

A) an increase in the real wage rate. 
B) a decrease in the real wage rate. 
C) a decrease in the money wage rate. 
D) a rise in the price level. 
E) an increase in the money wage rate. 
A) an increase in the real wage rate. 
B) a decrease in the real wage rate. 
C) a decrease in the money wage rate. 
D) a rise in the price level. 
E) an increase in the money wage rate.

Question 5

A decrease in foreign income-------------------- exports of U.S.-made goods, so aggregate demand and the aggregate demand curve shifts-------------------- .

Accepted Answer

A) decreases; decreases; leftward 
B) decreases; increases; rightward 
C) decreases; decreases; rightward 
D) increases; increases; leftward 
E) increases; increases; rightward 
A) decreases; decreases; leftward 
B) decreases; increases; rightward 
C) decreases; decreases; rightward 
D) increases; increases; leftward 
E) increases; increases; rightward

Question 6

Which of the following shifts the aggregate supply curve leftward?

Accepted Answer

A) decrease in the money price of oil 
B) increase in real GDP 
C) increase in potential GDP 
D) increase in the money wage rate 
E) a fall in the price level 
A) decrease in the money price of oil 
B) increase in real GDP 
C) increase in potential GDP 
D) increase in the money wage rate 
E) a fall in the price level

Question 7

The aggregate demand curve illustrates the relationship between

Accepted Answer

A) the price level and the potential quantity demanded of real GDP. 
B) the price level and the quantity of goods supplied by firms. 
C) the price level and the quantity of goods demanded by households, firms, government, and foreigners. 
D) the price level and the potential demand for real GDP. 
E) the real wage rate and the hours of labor demanded by firms. 
A) the price level and the potential quantity demanded of real GDP. 
B) the price level and the quantity of goods supplied by firms. 
C) the price level and the quantity of goods demanded by households, firms, government, and foreigners. 
D) the price level and the potential demand for real GDP. 
E) the real wage rate and the hours of labor demanded by firms.

Question 8

The aggregate supply curve shows the relationship between

Accepted Answer

A) potential GDP and real GDP. 
B) potential GDP and the price level. 
C) potential GDP and the aggregate demand curve. 
D) the quantity of real GDP supplied and the price level. 
E) the quantity of real GDP supplied and the interest rate. 
A) potential GDP and real GDP. 
B) potential GDP and the price level. 
C) potential GDP and the aggregate demand curve. 
D) the quantity of real GDP supplied and the price level. 
E) the quantity of real GDP supplied and the interest rate.

Question 9

A fall in the real wage rate

Accepted Answer

A) does not change; no change 
B) raises; an increase 
C) raises; a decrease 
D) lowers; an increase 
E) lowers; a decrease 
A) does not change; no change 
B) raises; an increase 
C) raises; a decrease 
D) lowers; an increase 
E) lowers; a decrease

Question 10

A change in the price level produces a --------------------the aggregate demand curve.
I. shift in
Ii. change in the slope of iii. movement along

Accepted Answer

A) i and ii 
B) iii only 
C) i only 
D) ii only 
E) i and iii 
A) i and ii 
B) iii only 
C) i only 
D) ii only 
E) i and iii

Question 11

Which of the following changes aggregate supply and shifts the aggregate supply curve?
I. change in the price level
Ii. change in potential GDP
Iii. change in the money wage rate

Accepted Answer

A) ii and iii 
B) i, ii, and iii 
C) iii only 
D) i only 
E) ii only 
A) ii and iii 
B) i, ii, and iii 
C) iii only 
D) i only 
E) ii only

Question 12

A tax increase

Accepted Answer

A) increases the quantity of real GDP demanded and there is a movement down along the AD curve. 
B) decreases aggregate demand and the AD curve shifts leftward. 
C) decreases the quantity of real GDP demanded and there is a movement up along the AD curve. 
D) does not shift or lead to a movement along the aggregate demand curve. 
E) increases aggregate demand and the AD curve shifts rightward. 
A) increases the quantity of real GDP demanded and there is a movement down along the AD curve. 
B) decreases aggregate demand and the AD curve shifts leftward. 
C) decreases the quantity of real GDP demanded and there is a movement up along the AD curve. 
D) does not shift or lead to a movement along the aggregate demand curve. 
E) increases aggregate demand and the AD curve shifts rightward.

Question 13

If the price level increases, there is --------------------the AD curve and the quantity of real GDP demanded--------------------
.

Accepted Answer

A) a movement upward along; decreases 
B) no change in; does not change 
C) a leftward shift in; decreases 
D) a movement upward along; increases 
E) a movement downward along; increases 
A) a movement upward along; decreases 
B) no change in; does not change 
C) a leftward shift in; decreases 
D) a movement upward along; increases 
E) a movement downward along; increases

Question 14

When investment increases, the --------------------in aggregate demand is the change in-------------------- lnvestment.

Accepted Answer

A) increase; greater than 
B) decrease; greater than 
C) increase; smaller than 
D) increase; the same as 
E) decrease; the same as 
A) increase; greater than 
B) decrease; greater than 
C) increase; smaller than 
D) increase; the same as 
E) decrease; the same as

Question 15

The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced

Accepted Answer

A) increase in exports. 
B) increase in consumption expenditure. 
C) increase in government expenditures on goods and services. 
D) increase in production expenditure. 
E) decrease in the price level. 
A) increase in exports. 
B) increase in consumption expenditure. 
C) increase in government expenditures on goods and services. 
D) increase in production expenditure. 
E) decrease in the price level.

An increase in the price level _{--------------------}the aggregate quantity supplied and _{--------------------} the aggregate quantity demanded.

Which of the following shifts the aggregate demand curve rightward?

Real GDP definitely increases if

The change reflected in the above figure might be a result of

A decrease in foreign income_{--------------------} exports of U.S.-made goods, so aggregate demand and the aggregate demand curve shifts_{--------------------} .

Which of the following shifts the aggregate supply curve leftward?

The aggregate demand curve illustrates the relationship between

The aggregate supply curve shows the relationship between

A fall in the real wage rate

A change in the price level produces a _{--------------------}the aggregate demand curve. I. shift in Ii. change in the slope of iii. movement along

Which of the following changes aggregate supply and shifts the aggregate supply curve? I. change in the price level Ii. change in potential GDP Iii. change in the money wage rate

A tax increase

If the price level increases, there is _{--------------------}the AD curve and the quantity of real GDP demanded_{--------------------} .

When investment increases, the _{--------------------}in aggregate demand is the change in_{--------------------} lnvestment.

The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

GDP: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 13: Aggregate Supply Ad Aggregate Demand

An increase in the price level --------------------the aggregate quantity supplied and -------------------- the aggregate quantity demanded.

Which of the following shifts the aggregate demand curve rightward?

Real GDP definitely increases if

The change reflected in the above figure might be a result of

A decrease in foreign income-------------------- exports of U.S.-made goods, so aggregate demand and the aggregate demand curve shifts-------------------- .

Which of the following shifts the aggregate supply curve leftward?

The aggregate demand curve illustrates the relationship between

The aggregate supply curve shows the relationship between

A fall in the real wage rate

A change in the price level produces a --------------------the aggregate demand curve. I. shift in Ii. change in the slope of iii. movement along

Which of the following changes aggregate supply and shifts the aggregate supply curve? I. change in the price level Ii. change in potential GDP Iii. change in the money wage rate

A tax increase

If the price level increases, there is --------------------the AD curve and the quantity of real GDP demanded-------------------- .

When investment increases, the --------------------in aggregate demand is the change in-------------------- lnvestment.

The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

GDP: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

An increase in the price level _{--------------------}the aggregate quantity supplied and _{--------------------} the aggregate quantity demanded.

A decrease in foreign income_{--------------------} exports of U.S.-made goods, so aggregate demand and the aggregate demand curve shifts_{--------------------} .

A change in the price level produces a _{--------------------}the aggregate demand curve. I. shift in Ii. change in the slope of iii. movement along

If the price level increases, there is _{--------------------}the AD curve and the quantity of real GDP demanded_{--------------------} .

When investment increases, the _{--------------------}in aggregate demand is the change in_{--------------------} lnvestment.