Question 1

-In the above figure, the aggregate demand curve is AD2, so the short-run equilibrium level of real GDP is

Accepted Answer

A)  $18 trillion. 
B)  $18.5 trillion. 
C)  more than $18 and less than $18.5 trillion. 
D)  None of the above answers is correct. 
A)  $18 trillion. 
B)  $18.5 trillion. 
C)  more than $18 and less than $18.5 trillion. 
D)  None of the above answers is correct.

Question 2

Suppose there is an increase in the short-run aggregate supply with no change in the long-run aggregate supply. This situation could be the result of

Accepted Answer

A)  an increase in the price of oil. 
B)  a decrease in the money wage rate. 
C)  a technological advancement. 
D)  an increase in the quantity of capital. 
A)  an increase in the price of oil. 
B)  a decrease in the money wage rate. 
C)  a technological advancement. 
D)  an increase in the quantity of capital.

Question 3

Over time in a growing economy, the long-run aggregate supply curve will

Accepted Answer

A)  become horizontal at the long-run potential price level. 
B)  shift rightward. 
C)  shift leftward. 
D)  become increasingly steep. 
A)  become horizontal at the long-run potential price level. 
B)  shift rightward. 
C)  shift leftward. 
D)  become increasingly steep.

Question 4

When the prices of U.S.-produced goods rise and the price of foreign-produced goods do not change, the result is

Accepted Answer

A)  an increase in exports. 
B)  a decrease in exports. 
C)  a decrease in imports. 
D)  no change in imports or exports. 
A)  an increase in exports. 
B)  a decrease in exports. 
C)  a decrease in imports. 
D)  no change in imports or exports.

Question 5

One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises,

Accepted Answer

A)  firms produce more goods and services. 
B)  firms produce fewer goods and services. 
C)  people substitute toward more imported goods and services. 
D)  peoples' wealth increases. 
A)  firms produce more goods and services. 
B)  firms produce fewer goods and services. 
C)  people substitute toward more imported goods and services. 
D)  peoples' wealth increases.

Question 6

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result, people will buy ________ Indian-made goods and there will be a movement ________ along India's aggregate demand curve.

Accepted Answer

A)  more; upward 
B)  more; downward 
C)  less; downward 
D)  less; upward 
A)  more; upward 
B)  more; downward 
C)  less; downward 
D)  less; upward

-In the above figure, the aggregate demand curve is AD₂, so the short-run equilibrium level of real GDP is

Suppose there is an increase in the short-run aggregate supply with no change in the long-run aggregate supply. This situation could be the result of

Over time in a growing economy, the long-run aggregate supply curve will

When the prices of U.S.-produced goods rise and the price of foreign-produced goods do not change, the result is

One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises,

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result, people will buy Indian-made goods and there will be a movement along India's aggregate demand curve.

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

-In the above figure, the aggregate demand curve is AD2, so the short-run equilibrium level of real GDP is

Suppose there is an increase in the short-run aggregate supply with no change in the long-run aggregate supply. This situation could be the result of

Over time in a growing economy, the long-run aggregate supply curve will

When the prices of U.S.-produced goods rise and the price of foreign-produced goods do not change, the result is

One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises,

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result, people will buy ________ Indian-made goods and there will be a movement ________ along India's aggregate demand curve.

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 aggregate demand curve is AD₂, so the short-run equilibrium level of real GDP is

The price level in India increases from 131 to 137 while its trading partners' price levels remain constant. As a result, people will buy Indian-made goods and there will be a movement along India's aggregate demand curve.