Question 1

Aggregate supply is defined as

Accepted Answer

A)  how much the economy can produce at zero unemployment. 
B)  an amount of output the economy will produce at full employment. 
C)  the relationship between the expenditures schedule and the leakages schedule. 
D)  the relationship between the price level and the quantity of real GDP supplied. 
A)  how much the economy can produce at zero unemployment. 
B)  an amount of output the economy will produce at full employment. 
C)  the relationship between the expenditures schedule and the leakages schedule. 
D)  the relationship between the price level and the quantity of real GDP supplied.

Question 2

The aggregate supply curve is a fixed point representing potential GDP.

Accepted Answer

A) True 
 B)False

Question 3

Figure 10-2
  
-In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

Accepted Answer

A)  AB 
B)  BC 
C)  CD 
D)  DG 
A)  AB 
B)  BC 
C)  CD 
D)  DG

Question 4

A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)

Accepted Answer

A)  increase in aggregate demand. 
B)  increase in aggregate supply. 
C)  decrease in aggregate demand. 
D)  decrease in aggregate supply. 
A)  increase in aggregate demand. 
B)  increase in aggregate supply. 
C)  decrease in aggregate demand. 
D)  decrease in aggregate supply.

Question 5

If profit per unit equals (price - cost per unit)and costs are temporarily fixed,then the aggregate supply curve will have

Accepted Answer

A)  a basic "U" shape. 
B)  a negative slope. 
C)  a positive slope. 
D)  All of the above could be correct. 
A)  a basic "U" shape. 
B)  a negative slope. 
C)  a positive slope. 
D)  All of the above could be correct.

Question 6

Demand-side changes explain everything about stagflation.

Accepted Answer

A) True 
 B)False

Question 7

The reason that stagflation tends to follow an inflationary gap is that

Accepted Answer

A)  output tends to fall even as prices continue to rise as part of the self-correcting mechanism. 
B)  government officials tend to overact in controlling inflation. 
C)  businesses try to increase profits by raising prices and increasing output. 
D)  workers accept pay cuts to maintain employment. 
A)  output tends to fall even as prices continue to rise as part of the self-correcting mechanism. 
B)  government officials tend to overact in controlling inflation. 
C)  businesses try to increase profits by raising prices and increasing output. 
D)  workers accept pay cuts to maintain employment.

Question 8

Figure 10-6
  
-In Figure 10-6,which graph best illustrates an autonomous increase in consumption spending?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4)

Question 9

Aggregate supply grows over time because of growing consumer and government spending.

Accepted Answer

A) True 
 B)False

Question 10

The major cost of production in the economy is

Accepted Answer

A)  interest expense. 
B)  capital costs. 
C)  rents. 
D)  profits. 
E)  wages. 
A)  interest expense. 
B)  capital costs. 
C)  rents. 
D)  profits. 
E)  wages.

Question 11

Recessionary gaps are associated with output below potential and high unemployment rates.

Accepted Answer

A) True 
 B)False

Question 12

When OPEC cut energy production in 1973,the aggregate supply curve shifted outward.

Accepted Answer

A) True 
 B)False

Question 13

The aggregate supply curve is the relationship between the price level and the quantity of real GDP purchased.

Accepted Answer

A) True 
 B)False

Question 14

If the price level does not fall or only falls very slowly,then the result will be a prolonged period of

Accepted Answer

A)  inflation whenever supply increases. 
B)  production below potential GDP. 
C)  production above potential GDP. 
D)  rapid price increases when demand changes. 
A)  inflation whenever supply increases. 
B)  production below potential GDP. 
C)  production above potential GDP. 
D)  rapid price increases when demand changes.

Question 15

The relationship between the price level and the quantity of real GDP supplied is

Accepted Answer

A)  full employment output. 
B)  inflationary or recessionary gap. 
C)  aggregate supply. 
D)  supply-side equilibrium. 
A)  full employment output. 
B)  inflationary or recessionary gap. 
C)  aggregate supply. 
D)  supply-side equilibrium.

Question 16

Figure 10-6
  
-In Figure 10-6,which graph best illustrates an adverse supply shock accompanied by an increase in government spending?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4)

Question 17

Economists believed that the U.S.economy had a (n)____ in 2006 and 2007.

Accepted Answer

A)  mild recession 
B)  small recessionary gap 
C)  small inflationary gap 
D)  deflationary gap 
A)  mild recession 
B)  small recessionary gap 
C)  small inflationary gap 
D)  deflationary gap

Question 18

An improvement in productivity will usually increase profits.

Accepted Answer

A) True 
 B)False

Question 19

If the data show that periods of high economic growth rate accompanied by high inflation rates,then changes in aggregate demand are the primary source of economic fluctuations.

Accepted Answer

A) True 
 B)False

Question 20

The aggregate supply curve is

Accepted Answer

A)  a schedule showing the relationship between the price level and the quantity of real GDP supplied. 
B)  usually upward sloping. 
C)  relatively flat at low levels of resource utilization. 
D)  All of the above are correct. 
A)  a schedule showing the relationship between the price level and the quantity of real GDP supplied. 
B)  usually upward sloping. 
C)  relatively flat at low levels of resource utilization. 
D)  All of the above are correct.

Aggregate supply is defined as

The aggregate supply curve is a fixed point representing potential GDP.

Figure 10-2 -In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)

If profit per unit equals (price - cost per unit)and costs are temporarily fixed,then the aggregate supply curve will have

Demand-side changes explain everything about stagflation.

The reason that stagflation tends to follow an inflationary gap is that

Figure 10-6 -In Figure 10-6,which graph best illustrates an autonomous increase in consumption spending?

Aggregate supply grows over time because of growing consumer and government spending.

The major cost of production in the economy is

Recessionary gaps are associated with output below potential and high unemployment rates.

When OPEC cut energy production in 1973,the aggregate supply curve shifted outward.

The aggregate supply curve is the relationship between the price level and the quantity of real GDP purchased.

If the price level does not fall or only falls very slowly,then the result will be a prolonged period of

The relationship between the price level and the quantity of real GDP supplied is

Figure 10-6 -In Figure 10-6,which graph best illustrates an adverse supply shock accompanied by an increase in government spending?

Economists believed that the U.S.economy had a (n)____ in 2006 and 2007.

An improvement in productivity will usually increase profits.

If the data show that periods of high economic growth rate accompanied by high inflation rates,then changes in aggregate demand are the primary source of economic fluctuations.

The aggregate supply curve is

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 10: Bringing in the Supply Side: Unemployment and Inflation?

Aggregate supply is defined as

The aggregate supply curve is a fixed point representing potential GDP.

Figure 10-2 -In Figure 10-2,which segment of the aggregate supply curve has the smallest multiplier effect?

A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)

If profit per unit equals (price - cost per unit)and costs are temporarily fixed,then the aggregate supply curve will have

Demand-side changes explain everything about stagflation.

The reason that stagflation tends to follow an inflationary gap is that

Figure 10-6 -In Figure 10-6,which graph best illustrates an autonomous increase in consumption spending?

Aggregate supply grows over time because of growing consumer and government spending.

The major cost of production in the economy is

Recessionary gaps are associated with output below potential and high unemployment rates.

When OPEC cut energy production in 1973,the aggregate supply curve shifted outward.

The aggregate supply curve is the relationship between the price level and the quantity of real GDP purchased.

If the price level does not fall or only falls very slowly,then the result will be a prolonged period of

The relationship between the price level and the quantity of real GDP supplied is

Figure 10-6 -In Figure 10-6,which graph best illustrates an adverse supply shock accompanied by an increase in government spending?

Economists believed that the U.S.economy had a (n)____ in 2006 and 2007.

An improvement in productivity will usually increase profits.

If the data show that periods of high economic growth rate accompanied by high inflation rates,then changes in aggregate demand are the primary source of economic fluctuations.

The aggregate supply curve is

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters