Question 1

The short-run aggregate supply curve

Accepted Answer

A) becomes flatter at output levels above the full-employment output. 
B) becomes steep at output levels above the full-employment output. 
C) is upward-sloping with a constant slope. 
D) is horizontal. 
A) becomes flatter at output levels above the full-employment output. 
B) becomes steep at output levels above the full-employment output. 
C) is upward-sloping with a constant slope. 
D) is horizontal.

Question 2

The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line.

Accepted Answer

A) True 
 B)False

Question 3

In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households.We would expect this to

Accepted Answer

A) affect neither aggregate supply nor aggregate demand. 
B) increase aggregate demand. 
C) reduce aggregate demand. 
D) reduce aggregate supply. 
A) affect neither aggregate supply nor aggregate demand. 
B) increase aggregate demand. 
C) reduce aggregate demand. 
D) reduce aggregate supply.

Question 4

If aggregate demand decreases, and, as a result, real output and employment decline but the price level remains unchanged, it is most likely that

Accepted Answer

A) the money supply has declined. 
B) the price level is inflexible downward and a recession has occurred. 
C) cost-push inflation has occurred. 
D) productivity has declined. 
A) the money supply has declined. 
B) the price level is inflexible downward and a recession has occurred. 
C) cost-push inflation has occurred. 
D) productivity has declined.

Question 5

In the accompanying table for a particular country, C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports.All figures are in billions of dollars.If this nation's equilibrium price level is 125, its net exports will be

Accepted Answer

A) minus $4 billion. 
B) minus $2 billion. 
C) zero. 
D) $2 billion. 
A) minus $4 billion. 
B) minus $2 billion. 
C) zero. 
D) $2 billion.

Question 6

Profit Expectations on Investments Answer the question based on the accompanying list of items related to aggregate demand or aggregate supply.A change in which factor is most likely to change both aggregate demand and aggregate supply?

Accepted Answer

A) 3 
B) 5 
C) 7 
D) 6 
A) 3 
B) 5 
C) 7 
D) 6

Question 7

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S.economy.

Accepted Answer

A) True 
 B)False

Exam 32: Aggregate Demand and Aggregate Supply

The short-run aggregate supply curve

The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line.

In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households.We would expect this to

If aggregate demand decreases, and, as a result, real output and employment decline but the price level remains unchanged, it is most likely that

In the accompanying table for a particular country, C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports.All figures are in billions of dollars.If this nation's equilibrium price level is 125, its net exports will be

Profit Expectations on Investments Answer the question based on the accompanying list of items related to aggregate demand or aggregate supply.A change in which factor is most likely to change both aggregate demand and aggregate supply?

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S.economy.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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