Question 1

The debt effect helps explain the:

Accepted Answer

A) inverse relationship between prices and consumption spending. 
B) positive relationship between prices and consumption spending. 
C) inverse relationship between real interest rates and consumption. 
D) positive relationship between real interest rates and consumption. 
A) inverse relationship between prices and consumption spending. 
B) positive relationship between prices and consumption spending. 
C) inverse relationship between real interest rates and consumption. 
D) positive relationship between real interest rates and consumption.

Question 2

Suppose that consumer expectations improve. This will cause a:

Accepted Answer

A) shift of the aggregate demand curve to the left. 
B) shift of the aggregate demand curve to the left 
C) movement up along the aggregate demand curve 
D) movement up along the aggregate demand curve. 
E) shift of the aggregate demand curve to the right
F)shift of the aggregate demand curve to the right.
G)movement down along the aggregate demand curve
H)movement down along the aggregate demand curve. 
A) shift of the aggregate demand curve to the left. 
B) shift of the aggregate demand curve to the left 
C) movement up along the aggregate demand curve 
D) movement up along the aggregate demand curve. 
E) shift of the aggregate demand curve to the right
F)shift of the aggregate demand curve to the right.
G)movement down along the aggregate demand curve
H)movement down along the aggregate demand curve.

Question 3

You are an analyst preparing a forecast of the effects of macroeconomic changes in the economy. What happens to prices and GDP when there is a major technological advancement that increases productivity in the economy? Illustrate your answer using a graph of the AD-AS framework.

Accepted Answer

The answer of You are an analyst preparing a forecast...

Question 4

When the price level in an economy increases, the quantity of output demanded in the economy:

Accepted Answer

A) falls. 
B) increases. 
C) stays constant. 
D) does not change unless the quantity of output supplied changes as well. 
A) falls. 
B) increases. 
C) stays constant. 
D) does not change unless the quantity of output supplied changes as well.

Question 5

When the aggregate price level _____, people want to hold _____ money.

Accepted Answer

A) increases; more 
B) increases; more. 
C) increases; less 
D) increases; less. 
E) decreases; more.
F)decreases; more
G)increases; the same amount of.
H)increases; the same amount of 
A) increases; more 
B) increases; more. 
C) increases; less 
D) increases; less. 
E) decreases; more.
F)decreases; more
G)increases; the same amount of.
H)increases; the same amount of

Question 6

The lower the GDP deflator in an economy, the:
(i) higher the purchasing power of the currency.
(ii) lower the real wealth in the economy.
(iii) higher the real wealth in an economy.
(iv) cheaper the country's exports.

Accepted Answer

A) (i) only 
B) (i), (ii), (iii), and (iv) 
C) (ii) and (iv) 
D) (i), (iii), and (iv) 
A) (i) only 
B) (i), (ii), (iii), and (iv) 
C) (ii) and (iv) 
D) (i), (iii), and (iv)

Question 7

A rise in labor productivity will MOST likely result in a(n):

Accepted Answer

A) increase in aggregate demand. 
B) increase in aggregate demand 
C) decrease in aggregate demand. 
D) decrease in aggregate demand 
E) decrease in aggregate supply
F)decrease in aggregate supply.
G)increase in aggregate supply
H)increase in aggregate supply. 
A) increase in aggregate demand. 
B) increase in aggregate demand 
C) decrease in aggregate demand. 
D) decrease in aggregate demand 
E) decrease in aggregate supply
F)decrease in aggregate supply.
G)increase in aggregate supply
H)increase in aggregate supply.

Question 8

Which graph correctly depicts the long-run aggregate supply curve?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 9

Consumption refers to the:

Accepted Answer

A) purchases of goods and services by households. 
B) taxes collected by the government. 
C) sum of all purchases of goods and services in the economy. 
D) total purchases of goods and services by consumers and the government. 
A) purchases of goods and services by households. 
B) taxes collected by the government. 
C) sum of all purchases of goods and services in the economy. 
D) total purchases of goods and services by consumers and the government.

Exam 33: Aggregate Demand and Aggregate Supply

The debt effect helps explain the:

Suppose that consumer expectations improve. This will cause a:

You are an analyst preparing a forecast of the effects of macroeconomic changes in the economy. What happens to prices and GDP when there is a major technological advancement that increases productivity in the economy? Illustrate your answer using a graph of the AD-AS framework.

When the price level in an economy increases, the quantity of output demanded in the economy:

When the aggregate price level _____, people want to hold _____ money.

The lower the GDP deflator in an economy, the: (i) higher the purchasing power of the currency. (ii) lower the real wealth in the economy. (iii) higher the real wealth in an economy. (iv) cheaper the country's exports.

A rise in labor productivity will MOST likely result in a(n):

Which graph correctly depicts the long-run aggregate supply curve?

Consumption refers to the:

The Core Principles of Economics

Demand: Thinking Like a Buyer

Supply: Thinking Like a Seller

Equilibrium: Where Supply Meets Demand

Elasticity: Measuring Responsiveness

When Governments Intervene in Markets

Welfare and Efficiency

Gains From Trade

International Trade

Externalities and Public Goods

Labor Demand and Supply

Wages, Workers, and Management

Inequality, Social Insurance, and Redistribution

Market Structure and Market Power

Entry, Exit, and Long-Run Profitability

Business Strategy

Sophisticated Pricing Strategies

Game Theory and Strategic Choices

Decisions Involving Uncertainty

Decisions With Private Information

Sizing up the Economy Using Gdp

Economic Growth

Unemployment

Inflation and Money

Consumption and Saving

Investment

The Financial Sector

International Finance and the Exchange Rate

Business Cycles

IS-MP Analysis: Interest Rates and Output

Phillips Curve

The Fed Model: Linking Interest Rates, Output, and Inflation

Monetary Policy

Government Spending, Taxes, and Fiscal Policy

Appendix: Aggregate Expenditure and the Multiplier

Filters

When the aggregate price level _, people want to hold _ money.