Question 1

The Laffer Curve underlies the contention that lower tax rates need not reduce tax revenues.

Accepted Answer

A) True 
 B)False

Question 2

Demand-pull inﬂation in the short run raises the price level and

Accepted Answer

A)  real wages. 
B)  real output. 
C)  the unemployment rate. 
D)  nominal wages. 
A)  real wages. 
B)  real output. 
C)  the unemployment rate. 
D)  nominal wages.

Question 3

Accepted Answer

A)  the nation's unemployment rate to be greater than the natural rate of unemployment. 
B)  the nation's unemployment rate to be less than the natural rate of unemployment. 
C)  product prices to decrease. 
D)  proﬁts to decrease. 
A)  the nation's unemployment rate to be greater than the natural rate of unemployment. 
B)  the nation's unemployment rate to be less than the natural rate of unemployment. 
C)  product prices to decrease. 
D)  proﬁts to decrease.

Question 4

Refer to the graph. Ongoing inﬂation would occur if the Fed

Accepted Answer

A)  increased the money supply, causing AD to shift faster than technological progress shifts AS. 
B)  increased the money supply, causing AD to shift slower than technological progress shifts AS. 
C)  increased the money supply, causing AD to shift as fast as technological progress shifts AS. 
D)  did not increase the money supply while technological progress is shifting AS. 
A)  increased the money supply, causing AD to shift faster than technological progress shifts AS. 
B)  increased the money supply, causing AD to shift slower than technological progress shifts AS. 
C)  increased the money supply, causing AD to shift as fast as technological progress shifts AS. 
D)  did not increase the money supply while technological progress is shifting AS.

Question 5

Refer to the diagram relating to short-run and long-run aggregate supply. The

Accepted Answer

A)  short-run aggregate supply curve is A. 
B)  short-run aggregate supply curve is B. 
C)  long-run aggregate supply curve is B. 
D)  long-run aggregate supply curve is D. 
A)  short-run aggregate supply curve is A. 
B)  short-run aggregate supply curve is B. 
C)  long-run aggregate supply curve is B. 
D)  long-run aggregate supply curve is D.

Question 6

As distinct from reductions in the price level, reductions in the rate of inﬂation are referred to as

Accepted Answer

A)  dollar depreciation. 
B)  stagﬂation. 
C)  deﬂation. 
D)  disinﬂation. 
A)  dollar depreciation. 
B)  stagﬂation. 
C)  deﬂation. 
D)  disinﬂation.

Question 7

Accepted Answer

A)  temporarily move the economy to point $B _ { 3 }$ 
B)  temporarily move the economy to point $C _ { 2 }$ 
C)  temporarily move the economy to point $C _ { 1 } .$ 
D)  have no effect in shifting the economy from point $B _ { 2 }$ 
A)  temporarily move the economy to point $B _ { 3 }$ 
B)  temporarily move the economy to point $C _ { 2 }$ 
C)  temporarily move the economy to point $C _ { 1 } .$ 
D)  have no effect in shifting the economy from point $B _ { 2 }$

Question 8

Which of the following allegedly contributed to the stagﬂation in the mid-1970s?

Accepted Answer

A)  appreciation of the dollar 
B)  a sharp drop in the prices of farm products 
C)  a dramatic increase in oil prices 
D)  rising productivity in manufacturing 
A)  appreciation of the dollar 
B)  a sharp drop in the prices of farm products 
C)  a dramatic increase in oil prices 
D)  rising productivity in manufacturing

The Laffer Curve underlies the contention that lower tax rates need not reduce tax revenues.

Demand-pull inﬂation in the short run raises the price level and

Refer to the graph. Ongoing inﬂation would occur if the Fed

Refer to the diagram relating to short-run and long-run aggregate supply. The

As distinct from reductions in the price level, reductions in the rate of inﬂation are referred to as

Which of the following allegedly contributed to the stagﬂation in the mid-1970s?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

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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Exam 18: Extending the Analysis of Aggregate Supply

The Laffer Curve underlies the contention that lower tax rates need not reduce tax revenues.

Demand-pull inﬂation in the short run raises the price level and

Refer to the graph. Ongoing inﬂation would occur if the Fed

Refer to the diagram relating to short-run and long-run aggregate supply. The

As distinct from reductions in the price level, reductions in the rate of inﬂation are referred to as

Which of the following allegedly contributed to the stagﬂation in the mid-1970s?

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters