Question 1

The aggregate demand curve shows that, if other factors are held constant, a

Accepted Answer

A)  higher price level results in a decrease in the quantity of real GDP demanded. 
B)  higher price level results in an increase in the quantity of real GDP demanded. 
C)  higher price level results in a lower interest rate. 
D)  lower price level results in a higher interest rate. 
A)  higher price level results in a decrease in the quantity of real GDP demanded. 
B)  higher price level results in an increase in the quantity of real GDP demanded. 
C)  higher price level results in a lower interest rate. 
D)  lower price level results in a higher interest rate.

Question 2

-In the above figure, the short-run aggregate supply curve is SAS1. If technology advances, there is

Accepted Answer

A)  an upward movement along SAS1. 
B)  a downward movement along SAS1. 
C)  a shift to SAS0. 
D)  a shift to SAS2. 
A)  an upward movement along SAS1. 
B)  a downward movement along SAS1. 
C)  a shift to SAS0. 
D)  a shift to SAS2.

Question 3

The long-run aggregate supply curve illustrates the

Accepted Answer

A)  relationship between the price level and real GDP when the economy is at full employment. 
B)  relationship between the price level and real GDP when the economy is at zero unemployment. 
C)  amount of products producers offer at various prices when money wages and other resource prices are fixed. 
D)  surpluses, shortages and equilibrium level of GDP. 
A)  relationship between the price level and real GDP when the economy is at full employment. 
B)  relationship between the price level and real GDP when the economy is at zero unemployment. 
C)  amount of products producers offer at various prices when money wages and other resource prices are fixed. 
D)  surpluses, shortages and equilibrium level of GDP.

Question 4

When the exchange rises, the

Accepted Answer

A)  AD curve shifts rightward. 
B)  AD curve shifts leftward. 
C)  LAS curve shifts rightward. 
D)  LAS curve shifts leftward. 
A)  AD curve shifts rightward. 
B)  AD curve shifts leftward. 
C)  LAS curve shifts rightward. 
D)  LAS curve shifts leftward.

Question 5

The country of Stanley is at an above-full-employment equilibrium. Which of the following events will return Stanley to full employment?

Accepted Answer

A)  an increase in government expenditures 
B)  a decrease in the interest rate 
C)  an increase in the money wage rate 
D)  an increase in the quantity of money 
A)  an increase in government expenditures 
B)  a decrease in the interest rate 
C)  an increase in the money wage rate 
D)  an increase in the quantity of money

Question 6

Which of the following statements is FALSE?

Accepted Answer

A)  Fiscal policy is the attempt to influence the economy using taxes, transfer payments, and government expenditures. 
B)  Government expenditure affects aggregate demand directly because government expenditure is a component of aggregate demand. 
C)  Taxes and transfer payments affect aggregate demand by changing disposable income. 
D)  An increase in disposable income leads to a decrease in aggregate demand. 
A)  Fiscal policy is the attempt to influence the economy using taxes, transfer payments, and government expenditures. 
B)  Government expenditure affects aggregate demand directly because government expenditure is a component of aggregate demand. 
C)  Taxes and transfer payments affect aggregate demand by changing disposable income. 
D)  An increase in disposable income leads to a decrease in aggregate demand.

Question 7

________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.

Accepted Answer

A)  Keynesian 
B)  Monetarist 
C)  Classical 
D)  All 
A)  Keynesian 
B)  Monetarist 
C)  Classical 
D)  All

Question 8

-In the above figure, which movement illustrates the impact of the price level and money wage rate rising at the same rate?

Accepted Answer

A)  E to H 
B)  E to K 
C)  E to G 
D)  E to J 
A)  E to H 
B)  E to K 
C)  E to G 
D)  E to J

Question 9

-In the above figure, the shift from point C to point B might be the result of

Accepted Answer

A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  a decrease in government expenditures. 
D)  an increase in the quantity of money. 
A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  a decrease in government expenditures. 
D)  an increase in the quantity of money.

Question 10

Which of the following does NOT shift the aggregate demand curve?

Accepted Answer

A)  a decrease in the quantity of money 
B)  an increase in people's expected future incomes 
C)  an increase in the price level 
D)  an increase in current foreign income 
A)  a decrease in the quantity of money 
B)  an increase in people's expected future incomes 
C)  an increase in the price level 
D)  an increase in current foreign income

Question 11

If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.

Accepted Answer

A)  decreases; upward 
B)  increases; upward 
C)  decreases; downward 
D)  increases; downward 
A)  decreases; upward 
B)  increases; upward 
C)  decreases; downward 
D)  increases; downward

Question 12

-In the above figure, the economy is initially at point B. If the Fed increases the quantity of money, there is

Accepted Answer

A)  a movement to point C. 
B)  a movement to point A. 
C)  a shift to AD2. 
D)  a shift to AD1. 
A)  a movement to point C. 
B)  a movement to point A. 
C)  a shift to AD2. 
D)  a shift to AD1.

Question 13

Other things equal, along the aggregate demand curve, a higher price level is associated with

Accepted Answer

A)  an increase in the quantity of real GDP demanded. 
B)  a decrease in the quantity of real GDP demanded. 
C)  a decrease in the quantity of nominal GDP demanded. 
D)  higher income levels. 
A)  an increase in the quantity of real GDP demanded. 
B)  a decrease in the quantity of real GDP demanded. 
C)  a decrease in the quantity of nominal GDP demanded. 
D)  higher income levels.

Question 14

-In the above figure, if the economy is at point a, an increase in ________ will move the economy to ________.

Accepted Answer

A)  real wealth from the fall in the price level; point b 
B)  real wealth from the fall in the price level; point c 
C)  expected future income; point c 
D)  expected future income; point d 
A)  real wealth from the fall in the price level; point b 
B)  real wealth from the fall in the price level; point c 
C)  expected future income; point c 
D)  expected future income; point d

Question 15

-Based on the data in the table above, in the adjustment towards the long-run equilibrium

Accepted Answer

A)  money wage rates will rise. 
B)  the aggregate demand curve will shift leftward. 
C)  the short-run aggregate supply curve will shift leftward. 
D)  the short-run aggregate supply curve will shift rightward. 
A)  money wage rates will rise. 
B)  the aggregate demand curve will shift leftward. 
C)  the short-run aggregate supply curve will shift leftward. 
D)  the short-run aggregate supply curve will shift rightward.

Question 16

-The table above shows Purpleland's economy aggregate demand and supply schedules. Purpleland's potential GDP is $675 billion.
a) Plot the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.
b) What are the short-run equilibrium real GDP and price level in Purpleland?
c) What is the long-run equilibrium real GDP?
d) Is Purpleland's short-run macroeconomic equilibrium a full-employment equilibrium, below full-employment equilibrium, or above full-employment equilibrium? What is the recessionary gap (if any)? What is the inflationary gap (if any)?
e) Suppose aggregate demand increases by $150 billion. Plot the new aggregate demand curve. How do real GDP and the price level change in the short run?
f) Is Purpleland's new short-run macroeconomic equilibrium a full-employment equilibrium, below full-employment equilibrium, or above full-employment equilibrium? What is the recessionary gap (if any)? What is the inflationary gap (if any)?

Accepted Answer

@#IMG-DLM& a) See the figure above. The aggregate

Question 17

The aggregate demand curve

Accepted Answer

A)  shifts leftward when the price level increases and shifts rightward when the price level falls. 
B)  shifts rightward when taxes are decreased. 
C)  shifts rightward when foreign incomes decrease and shifts leftward when foreign incomes increase. 
D)  shifts leftward when taxes are decreased. 
A)  shifts leftward when the price level increases and shifts rightward when the price level falls. 
B)  shifts rightward when taxes are decreased. 
C)  shifts rightward when foreign incomes decrease and shifts leftward when foreign incomes increase. 
D)  shifts leftward when taxes are decreased.

Question 18

An increase in the money wage rate shifts the short-run aggregate supply curve ________, while an increase in technology shifts the long-run aggregate supply curve ________.

Accepted Answer

A)  rightward; rightward 
B)  rightward; leftward 
C)  leftward; rightward 
D)  leftward; leftward 
A)  rightward; rightward 
B)  rightward; leftward 
C)  leftward; rightward 
D)  leftward; leftward

Question 19

If the money wage rate rises, then the

Accepted Answer

A)  SAS curve shifts rightward. 
B)  SAS curve shifts leftward. 
C)  LAS curve shifts rightward. 
D)  LAS curve shifts leftward. 
A)  SAS curve shifts rightward. 
B)  SAS curve shifts leftward. 
C)  LAS curve shifts rightward. 
D)  LAS curve shifts leftward.

Question 20

A decrease in the money wage rate

Accepted Answer

A)  increases the long-run aggregate supply. 
B)  decreases the long-run aggregate supply. 
C)  increases the short-run aggregate supply. 
D)  decreases the short-run aggregate supply. 
A)  increases the long-run aggregate supply. 
B)  decreases the long-run aggregate supply. 
C)  increases the short-run aggregate supply. 
D)  decreases the short-run aggregate supply.

The aggregate demand curve shows that, if other factors are held constant, a

-In the above figure, the short-run aggregate supply curve is SAS₁. If technology advances, there is

The long-run aggregate supply curve illustrates the

When the exchange rises, the

The country of Stanley is at an above-full-employment equilibrium. Which of the following events will return Stanley to full employment?

Which of the following statements is FALSE?

________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.

-In the above figure, which movement illustrates the impact of the price level and money wage rate rising at the same rate?

-In the above figure, the shift from point C to point B might be the result of

Which of the following does NOT shift the aggregate demand curve?

If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth and there is a movement along Great Britain's aggregate demand curve.

-In the above figure, the economy is initially at point B. If the Fed increases the quantity of money, there is

Other things equal, along the aggregate demand curve, a higher price level is associated with

-In the above figure, if the economy is at point a, an increase in will move the economy to .

-Based on the data in the table above, in the adjustment towards the long-run equilibrium

The aggregate demand curve

An increase in the money wage rate shifts the short-run aggregate supply curve , while an increase in technology shifts the long-run aggregate supply curve .

If the money wage rate rises, then the

A decrease in the money wage rate

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 10: Aggregate Supply and Aggregate Demand

The aggregate demand curve shows that, if other factors are held constant, a

-In the above figure, the short-run aggregate supply curve is SAS1. If technology advances, there is

The long-run aggregate supply curve illustrates the

When the exchange rises, the

The country of Stanley is at an above-full-employment equilibrium. Which of the following events will return Stanley to full employment?

Which of the following statements is FALSE?

________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.

-In the above figure, which movement illustrates the impact of the price level and money wage rate rising at the same rate?

-In the above figure, the shift from point C to point B might be the result of

Which of the following does NOT shift the aggregate demand curve?

If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.

-In the above figure, the economy is initially at point B. If the Fed increases the quantity of money, there is

Other things equal, along the aggregate demand curve, a higher price level is associated with

-In the above figure, if the economy is at point a, an increase in ________ will move the economy to ________.

-Based on the data in the table above, in the adjustment towards the long-run equilibrium

The aggregate demand curve

An increase in the money wage rate shifts the short-run aggregate supply curve ________, while an increase in technology shifts the long-run aggregate supply curve ________.

If the money wage rate rises, then the

A decrease in the money wage rate

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-In the above figure, the short-run aggregate supply curve is SAS₁. If technology advances, there is

If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth and there is a movement along Great Britain's aggregate demand curve.

-In the above figure, if the economy is at point a, an increase in will move the economy to .

An increase in the money wage rate shifts the short-run aggregate supply curve , while an increase in technology shifts the long-run aggregate supply curve .