Question 1

Because individual demand curves slope down, the aggregate demand curve slopes up.

Accepted Answer

A) True 
 B)False

Question 2

The equilibrium price level

Accepted Answer

A)  is determined by the intersection of aggregate supply and aggregate demand. 
B)  is determined by the percentage of the labor force composed of immigrants. 
C)  is not affected by changes in aggregate demand. 
D)  is not affected by changes in aggregate supply. 
A)  is determined by the intersection of aggregate supply and aggregate demand. 
B)  is determined by the percentage of the labor force composed of immigrants. 
C)  is not affected by changes in aggregate demand. 
D)  is not affected by changes in aggregate supply.

Question 3

According to the real-balance effect, an increase in the price level will

Accepted Answer

A)  leave the total quantity of goods and services purchased unchanged since the price level of all goods has increased. 
B)  decrease the total quantity of goods and services purchased because of an increase in interest rates. 
C)  lead to a corresponding increase in the purchase of goods and services since businesses are now earning more money. 
D)  decrease the quantity of goods and services as a result of a decrease in the real value of money balances. 
A)  leave the total quantity of goods and services purchased unchanged since the price level of all goods has increased. 
B)  decrease the total quantity of goods and services purchased because of an increase in interest rates. 
C)  lead to a corresponding increase in the purchase of goods and services since businesses are now earning more money. 
D)  decrease the quantity of goods and services as a result of a decrease in the real value of money balances.

Question 4

Which one of the following changes when aggregate supply changes?

Accepted Answer

A)  The equilibrium level of real output 
B)  The position of the aggregate demand curve 
C)  The slope of the aggregate demand curve 
D)  All of the above 
A)  The equilibrium level of real output 
B)  The position of the aggregate demand curve 
C)  The slope of the aggregate demand curve 
D)  All of the above

Question 5

The aggregate supply curve is

Accepted Answer

A)  horizontal if the economy is experiencing full employment. 
B)  a representation of the effect of interest rate changes on the savings rate. 
C)  a representation of the spending plans of consumers, firms, and governments. 
D)  a representation of the willingness of firms to expand production as the price level rises. 
A)  horizontal if the economy is experiencing full employment. 
B)  a representation of the effect of interest rate changes on the savings rate. 
C)  a representation of the spending plans of consumers, firms, and governments. 
D)  a representation of the willingness of firms to expand production as the price level rises.

Question 6

The profit motive explains the upward slope of aggregate supply.

Accepted Answer

A) True 
 B)False

Question 7

If actual output is above the equilibrium level, inventories will accumulate, and firms will increase prices to cover the added cost of carrying more inventory.

Accepted Answer

A) True 
 B)False

Question 8

What aspect of firm behavior accounts for the upward slope of aggregate supply?

Accepted Answer

The answer of What aspect of firm behavior accounts for...

Question 9

Which of the following would likely result in a shift of the AD curve to the right?

Accepted Answer

A)  Tax decreases 
B)  Decreases in job security 
C)  Tax increases 
D)  Worsening economic conditions in other countries 
A)  Tax decreases 
B)  Decreases in job security 
C)  Tax increases 
D)  Worsening economic conditions in other countries

Question 10

The effect of a decrease in aggregate demand is to decrease the price level and to decrease unemployment.

Accepted Answer

A) True 
 B)False

Question 11

Changes in the price level result from a shift of either _________ supply or _________ demand.

Accepted Answer

aggregate,

Question 12

The effect of an increase in aggregate demand is to increase the price level and to increase real output.

Accepted Answer

A) True 
 B)False

Question 13

A rightward-shift of aggregate demand without any change in aggregate supply

Accepted Answer

A)  will leave real GDP unchanged. 
B)  will leave the price level unchanged. 
C)  increases the price level without any change in real output. 
D)  increases the price level along with an increase in output. 
A)  will leave real GDP unchanged. 
B)  will leave the price level unchanged. 
C)  increases the price level without any change in real output. 
D)  increases the price level along with an increase in output.

Question 14

How are the price level and the level of real output affected if aggregate demand decreases?

Accepted Answer

The price level decr

Question 15

Aggregate demand shows the relationship between the amount of exports and the overall level of spending.

Accepted Answer

A) True 
 B)False

Question 16

The circular flow model of the economy depicts the exchange of resources between the agricultural sector and the manufacturing sector.

Accepted Answer

A) True 
 B)False

Question 17

Increases in the price level reduce the _________ power of financial assets.

Accepted Answer

The answer of Increases in the price level reduce the...

Question 18

Real GDP can increase as a result of

Accepted Answer

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

Question 19

Increased immigration over time increases aggregate supply.

Accepted Answer

A) True 
 B)False

Question 20

Increases in aggregate demand

Accepted Answer

A)  will leave real GDP unchanged. 
B)  will cause aggregate supply to increase. 
C)  will cause aggregate supply to decrease. 
D)  lead to increases in the price level. 
A)  will leave real GDP unchanged. 
B)  will cause aggregate supply to increase. 
C)  will cause aggregate supply to decrease. 
D)  lead to increases in the price level.

Because individual demand curves slope down, the aggregate demand curve slopes up.

The equilibrium price level

According to the real-balance effect, an increase in the price level will

Which one of the following changes when aggregate supply changes?

The aggregate supply curve is

The profit motive explains the upward slope of aggregate supply.

If actual output is above the equilibrium level, inventories will accumulate, and firms will increase prices to cover the added cost of carrying more inventory.

What aspect of firm behavior accounts for the upward slope of aggregate supply?

Which of the following would likely result in a shift of the AD curve to the right?

The effect of a decrease in aggregate demand is to decrease the price level and to decrease unemployment.

Changes in the price level result from a shift of either _ supply or _ demand.

The effect of an increase in aggregate demand is to increase the price level and to increase real output.

A rightward-shift of aggregate demand without any change in aggregate supply

How are the price level and the level of real output affected if aggregate demand decreases?

Aggregate demand shows the relationship between the amount of exports and the overall level of spending.

The circular flow model of the economy depicts the exchange of resources between the agricultural sector and the manufacturing sector.

Increases in the price level reduce the _________ power of financial assets.

Real GDP can increase as a result of

Increased immigration over time increases aggregate supply.

Increases in aggregate demand

Economics and the World of Scarcity

The United States Within the World Economy

Demand and Supply

Consumer Decision Making and Consumer Reaction to Price Changes

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters

Exam 11: Aggregate Demand and Supply

Because individual demand curves slope down, the aggregate demand curve slopes up.

The equilibrium price level

According to the real-balance effect, an increase in the price level will

Which one of the following changes when aggregate supply changes?

The aggregate supply curve is

The profit motive explains the upward slope of aggregate supply.

If actual output is above the equilibrium level, inventories will accumulate, and firms will increase prices to cover the added cost of carrying more inventory.

What aspect of firm behavior accounts for the upward slope of aggregate supply?

Which of the following would likely result in a shift of the AD curve to the right?

The effect of a decrease in aggregate demand is to decrease the price level and to decrease unemployment.

Changes in the price level result from a shift of either _________ supply or _________ demand.

The effect of an increase in aggregate demand is to increase the price level and to increase real output.

A rightward-shift of aggregate demand without any change in aggregate supply

How are the price level and the level of real output affected if aggregate demand decreases?

Aggregate demand shows the relationship between the amount of exports and the overall level of spending.

The circular flow model of the economy depicts the exchange of resources between the agricultural sector and the manufacturing sector.

Increases in the price level reduce the _________ power of financial assets.

Real GDP can increase as a result of

Increased immigration over time increases aggregate supply.

Increases in aggregate demand

Economics and the World of Scarcity

The United States Within the World Economy

Demand and Supply

Consumer Decision Making and Consumer Reaction to Price Changes

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters

Changes in the price level result from a shift of either _ supply or _ demand.