Question 1

In which of the following situations would the long-run aggregate-supply curve shift left?

Accepted Answer

A) if the capital stock increases 
B) if there is a hurricane 
C) if the government removes some environmental regulations that limit production methods 
D) if trade barriers are removed 
A) if the capital stock increases 
B) if there is a hurricane 
C) if the government removes some environmental regulations that limit production methods 
D) if trade barriers are removed

Question 2

Discuss what economists believe is different about the long and short run.

Accepted Answer

Most economists believe that in the long

Question 3

When would the long-run aggregate-supply curve shift right?

Accepted Answer

A) When immigration increases or the government makes a substantial increase in the minimum wage. 
B) When immigration decreases or the government abolishes the minimum wage. 
C) When immigration increases or the government abolishes the minimum wage. 
D) When immigration decreases or the government makes a substantial increase in the minimum wage. 
A) When immigration increases or the government makes a substantial increase in the minimum wage. 
B) When immigration decreases or the government abolishes the minimum wage. 
C) When immigration increases or the government abolishes the minimum wage. 
D) When immigration decreases or the government makes a substantial increase in the minimum wage.

Question 4

Which of the following happens to aggregate demand if people want to save more for retirement and the government raises taxes?

Accepted Answer

A) Aggregate demand shifts right. 
B) Aggregate demand shifts left. 
C) If people save more, aggregate demand shifts right; if the government raises taxes, aggregate demand shifts left. 
D) If people save more, aggregate demand shifts left; if the government raises taxes, aggregate demand shifts right. 
A) Aggregate demand shifts right. 
B) Aggregate demand shifts left. 
C) If people save more, aggregate demand shifts right; if the government raises taxes, aggregate demand shifts left. 
D) If people save more, aggregate demand shifts left; if the government raises taxes, aggregate demand shifts right.

Question 5

During World War II,output increased by a larger percentage than government expenditures.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following explains why production rises in most years?

Accepted Answer

A) increases in prices of goods and services 
B) increases in stock prices 
C) aging population 
D) technological innovation 
A) increases in prices of goods and services 
B) increases in stock prices 
C) aging population 
D) technological innovation

Question 7

According to the aggregate demand and aggregate supply model,in the long run what is the impact of an increase in the money supply?

Accepted Answer

A) It lowers both the price level and real GDP. 
B) It increases GDP, but it does not change the price level. 
C) It increases the price level, but it does not change real GDP. 
D) It increases both the price level and real GDP. 
A) It lowers both the price level and real GDP. 
B) It increases GDP, but it does not change the price level. 
C) It increases the price level, but it does not change real GDP. 
D) It increases both the price level and real GDP.

Question 8

Which of the following is consistent with the theory of aggregate supply?

Accepted Answer

A) An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level shifts the short-run aggregate supply to the right. 
B) An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level does not shift the short-run aggregate supply. 
C) An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level shifts the short-run aggregate supply to the left. 
D) An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level does not shift the short-run aggregate supply. 
A) An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level shifts the short-run aggregate supply to the right. 
B) An increase in the expected price level shifts the short-run aggregate-supply curve to the right, and an increase in the actual price level does not shift the short-run aggregate supply. 
C) An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level shifts the short-run aggregate supply to the left. 
D) An increase in the expected price level shifts the short-run aggregate-supply curve to the left, and an increase in the actual price level does not shift the short-run aggregate supply.

Question 9

On average over the past 130 years,at about what rate has the Canadian economy grown?

Accepted Answer

A) 1 percent per year 
B) 2 percent per year 
C) 4 percent per year 
D) 6 percent per year 
A) 1 percent per year 
B) 2 percent per year 
C) 4 percent per year 
D) 6 percent per year

Question 10

Use the misperceptions theory to discuss the economic forces that shift the aggregate-supply curve when the expectations about the overall price level change.

Accepted Answer

According to the misperceptions theory,s

Question 11

According to the classical view in economics,which of the following variables or policies can influence economic growth in the long run?

Accepted Answer

A) an increase in capital stock 
B) an increase in money supply 
C) an increase in unemployment benefits 
D) an increase in nominal interest rates 
A) an increase in capital stock 
B) an increase in money supply 
C) an increase in unemployment benefits 
D) an increase in nominal interest rates

Question 12

In the aggregate demand and aggregate supply model,when does the aggregate quantity of goods demanded increase?

Accepted Answer

A) when real wealth falls 
B) when the interest rate rises 
C) when the dollar depreciates 
D) when stock prices decrease 
A) when real wealth falls 
B) when the interest rate rises 
C) when the dollar depreciates 
D) when stock prices decrease

Question 13

How is the effect of an increase in the price level represented?

Accepted Answer

A) by a shift to the right of the aggregate-demand curve 
B) by a shift to the left of the aggregate-demand curve 
C) by a movement to the left along a given aggregate-demand curve 
D) by a movement to the right along a given aggregate-demand curve 
A) by a shift to the right of the aggregate-demand curve 
B) by a shift to the left of the aggregate-demand curve 
C) by a movement to the left along a given aggregate-demand curve 
D) by a movement to the right along a given aggregate-demand curve

Question 14

What did Keynes believe caused recessions and depressions?

Accepted Answer

A) excess aggregate demand 
B) inadequate aggregate demand 
C) excess aggregate supply 
D) inadequate aggregate supply 
A) excess aggregate demand 
B) inadequate aggregate demand 
C) excess aggregate supply 
D) inadequate aggregate supply

Question 15

According to the sticky-price theory,which of the following is consistent with a more-than-expected rise in the price level?

Accepted Answer

A) Some firms' prices are higher than desired, which increases their sales. 
B) Some firms' prices are higher than desired, which depresses their sales. 
C) Some firms' prices are lower than desired, which increases their sales. 
D) Some firms' prices are lower than desired, which depresses their sales. 
A) Some firms' prices are higher than desired, which increases their sales. 
B) Some firms' prices are higher than desired, which depresses their sales. 
C) Some firms' prices are lower than desired, which increases their sales. 
D) Some firms' prices are lower than desired, which depresses their sales.

Question 16

An unexpected increase in the price level does not shift the aggregate-supply curve,but an expected increase in the price level shifts the aggregate-supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 17

How does the aggregate demand and aggregate supply model reflect a rise in production costs?

Accepted Answer

A) The short-run aggregate-supply curve shifts to the right. 
B) The short-run aggregate-supply curve shifts to the left. 
C) The aggregate-demand curve shifts to the right. 
D) The aggregate-demand curve shifts to the left. 
A) The short-run aggregate-supply curve shifts to the right. 
B) The short-run aggregate-supply curve shifts to the left. 
C) The aggregate-demand curve shifts to the right. 
D) The aggregate-demand curve shifts to the left.

Question 18

A decrease in the money supply causes the interest rate to rise so that investment rises.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following best describes the aggregate demand and aggregate supply model?

Accepted Answer

A) Aggregate supply adjusts to equate aggregate demand at the prevailing market prices. 
B) The price level adjusts to equate aggregate demand to aggregate supply. 
C) Aggregate demand adjusts to equate aggregate supply at the prevailing market prices. 
D) Both aggregate demand and supply adjust to become equal at the prevailing market prices. 
A) Aggregate supply adjusts to equate aggregate demand at the prevailing market prices. 
B) The price level adjusts to equate aggregate demand to aggregate supply. 
C) Aggregate demand adjusts to equate aggregate supply at the prevailing market prices. 
D) Both aggregate demand and supply adjust to become equal at the prevailing market prices.

Question 20

During Canada's three last recessions,investment spending accounted for what percentage of the decline in GDP?

Accepted Answer

A) 20 percent 
B) 30 percent 
C) 50 percent 
D) 80 percent 
A) 20 percent 
B) 30 percent 
C) 50 percent 
D) 80 percent

In which of the following situations would the long-run aggregate-supply curve shift left?

Discuss what economists believe is different about the long and short run.

When would the long-run aggregate-supply curve shift right?

Which of the following happens to aggregate demand if people want to save more for retirement and the government raises taxes?

During World War II,output increased by a larger percentage than government expenditures.

Which of the following explains why production rises in most years?

According to the aggregate demand and aggregate supply model,in the long run what is the impact of an increase in the money supply?

Which of the following is consistent with the theory of aggregate supply?

On average over the past 130 years,at about what rate has the Canadian economy grown?

Use the misperceptions theory to discuss the economic forces that shift the aggregate-supply curve when the expectations about the overall price level change.

According to the classical view in economics,which of the following variables or policies can influence economic growth in the long run?

In the aggregate demand and aggregate supply model,when does the aggregate quantity of goods demanded increase?

How is the effect of an increase in the price level represented?

What did Keynes believe caused recessions and depressions?

According to the sticky-price theory,which of the following is consistent with a more-than-expected rise in the price level?

An unexpected increase in the price level does not shift the aggregate-supply curve,but an expected increase in the price level shifts the aggregate-supply curve to the left.

How does the aggregate demand and aggregate supply model reflect a rise in production costs?

A decrease in the money supply causes the interest rate to rise so that investment rises.

Which of the following best describes the aggregate demand and aggregate supply model?

During Canada's three last recessions,investment spending accounted for what percentage of the decline in GDP?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains from Trade

The Market Forces of Supply and Demand (PART 1)

The Market Forces of Supply and Demand (PART 2)

Measuring a Nation's Income

Measuring the Cost of Living

Production and Growth

Saving,Investment,and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff between Inflation and Unemployment

Five Debates over Macroeconomic Policy

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Exam 14: Aggregate Demand and Aggregate Supply

In which of the following situations would the long-run aggregate-supply curve shift left?

Discuss what economists believe is different about the long and short run.

When would the long-run aggregate-supply curve shift right?

Which of the following happens to aggregate demand if people want to save more for retirement and the government raises taxes?

During World War II,output increased by a larger percentage than government expenditures.

Which of the following explains why production rises in most years?

According to the aggregate demand and aggregate supply model,in the long run what is the impact of an increase in the money supply?

Which of the following is consistent with the theory of aggregate supply?

On average over the past 130 years,at about what rate has the Canadian economy grown?

Use the misperceptions theory to discuss the economic forces that shift the aggregate-supply curve when the expectations about the overall price level change.

According to the classical view in economics,which of the following variables or policies can influence economic growth in the long run?

In the aggregate demand and aggregate supply model,when does the aggregate quantity of goods demanded increase?

How is the effect of an increase in the price level represented?

What did Keynes believe caused recessions and depressions?

According to the sticky-price theory,which of the following is consistent with a more-than-expected rise in the price level?

An unexpected increase in the price level does not shift the aggregate-supply curve,but an expected increase in the price level shifts the aggregate-supply curve to the left.

How does the aggregate demand and aggregate supply model reflect a rise in production costs?

A decrease in the money supply causes the interest rate to rise so that investment rises.

Which of the following best describes the aggregate demand and aggregate supply model?

During Canada's three last recessions,investment spending accounted for what percentage of the decline in GDP?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains from Trade

The Market Forces of Supply and Demand (PART 1)

The Market Forces of Supply and Demand (PART 2)

Measuring a Nation's Income

Measuring the Cost of Living

Production and Growth

Saving,Investment,and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff between Inflation and Unemployment

Five Debates over Macroeconomic Policy

Filters