Question 1

A fall in the price level

Accepted Answer

A)  increases the real value of money balances. 
B)  decreases the value of real money balances. 
C)  shifts aggregate demand to the right. 
D)  shifts aggregate demand to the left. 
A)  increases the real value of money balances. 
B)  decreases the value of real money balances. 
C)  shifts aggregate demand to the right. 
D)  shifts aggregate demand to the left.

Question 2

As consumers increase their planned spending

Accepted Answer

A)  aggregate demand increases. 
B)  aggregate demand decreases. 
C)  aggregate supply increases. 
D)  aggregate supply decreases. 
A)  aggregate demand increases. 
B)  aggregate demand decreases. 
C)  aggregate supply increases. 
D)  aggregate supply decreases.

Question 3

An increase in the price level in the United States would cause a

Accepted Answer

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

Question 4

What two effects account for the downward slope of aggregate demand?

Accepted Answer

The real balance eff

Question 5

The equilibrium price level for our domestic economy occurs when the aggregate demand curve intersects the ___________ ___________ curve.

Accepted Answer

A)  production possibilities 
B)  opportunity cost 
C)  wage effect 
D)  aggregate supply 
A)  production possibilities 
B)  opportunity cost 
C)  wage effect 
D)  aggregate supply

Question 6

A decrease in the exchange value of the dollar will

Accepted Answer

A)  decrease aggregate demand, thereby decreasing the price level. 
B)  decrease aggregate demand, thereby increasing the price level. 
C)  increase aggregate demand, thereby decreasing the price level. 
D)  increase aggregate demand, thereby increasing the price level. 
A)  decrease aggregate demand, thereby decreasing the price level. 
B)  decrease aggregate demand, thereby increasing the price level. 
C)  increase aggregate demand, thereby decreasing the price level. 
D)  increase aggregate demand, thereby increasing the price level.

Question 7

How does a decrease in the foreign exchange value of the dollar affect aggregate demand?

Accepted Answer

The answer of How does a decrease in the foreign...

Question 8

How is aggregate demand affected if other countries become more prosperous?

Accepted Answer

The answer of How is aggregate demand affected if other...

Question 9

The circular flow model represents the _________ market and the factor market.

Accepted Answer

The answer of The circular flow model represents the _________...

Question 10

The real balance effect and the open economy effect account for the downward slope of aggregate demand.

Accepted Answer

A) True 
 B)False

Question 11

The circular flow model depicts exchanges of goods and money between the household sector and the _________ sector.

Accepted Answer

The answer of The circular flow model depicts exchanges of...

Question 12

Aggregate supply is the total of all planned production for an economy over a specific time period.

Accepted Answer

A) True 
 B)False

Question 13

The aggregate demand curve slopes

Accepted Answer

A)  down. 
B)  up. 
C)  either up or down, depending on whether there is a recession or not. 
D)  neither up nor down; it is horizontal. 
A)  down. 
B)  up. 
C)  either up or down, depending on whether there is a recession or not. 
D)  neither up nor down; it is horizontal.

Question 14

If the amount of goods supplied by firms exceeds planned spending then

Accepted Answer

A)  inventories are depleted and firms raise prices. 
B)  inventories accumulate and firms raise prices. 
C)  inventories accumulate and firms reduce prices. 
D)  inventories are depleted and firms reduce prices. 
A)  inventories are depleted and firms raise prices. 
B)  inventories accumulate and firms raise prices. 
C)  inventories accumulate and firms reduce prices. 
D)  inventories are depleted and firms reduce prices.

Question 15

An increase in aggregate supply causes the price level to _________ .

Accepted Answer

The answer of An increase in aggregate supply causes the...

Question 16

The upward slope of the supply curve is explained by

Accepted Answer

A)  the profit motive of firms. 
B)  the bargaining strength of labor unions. 
C)  the open economy effect. 
D)  the real balance effect. 
A)  the profit motive of firms. 
B)  the bargaining strength of labor unions. 
C)  the open economy effect. 
D)  the real balance effect.

Question 17

All of the following would cause the aggregate demand curve to shift EXCEPT

Accepted Answer

A)  an increase in the price level. 
B)  an increase in taxes. 
C)  a decrease in taxes. 
D)  improving levels of prosperity in other countries. 
A)  an increase in the price level. 
B)  an increase in taxes. 
C)  a decrease in taxes. 
D)  improving levels of prosperity in other countries.

Question 18

An increase in aggregate demand will cause an increase in aggregate supply.

Accepted Answer

A) True 
 B)False

Question 19

The model of aggregate supply and aggregate demand is based on the assumption that it is only wage changes, not price changes, that determine a firm's production and employment plans.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

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

A fall in the price level

As consumers increase their planned spending

An increase in the price level in the United States would cause a

What two effects account for the downward slope of aggregate demand?

The equilibrium price level for our domestic economy occurs when the aggregate demand curve intersects the _ _ curve.

A decrease in the exchange value of the dollar will

How does a decrease in the foreign exchange value of the dollar affect aggregate demand?

How is aggregate demand affected if other countries become more prosperous?

The circular flow model represents the _________ market and the factor market.

The real balance effect and the open economy effect account for the downward slope of aggregate demand.

The circular flow model depicts exchanges of goods and money between the household sector and the _________ sector.

Aggregate supply is the total of all planned production for an economy over a specific time period.

The aggregate demand curve slopes

If the amount of goods supplied by firms exceeds planned spending then

An increase in aggregate supply causes the price level to _________ .

The upward slope of the supply curve is explained by

All of the following would cause the aggregate demand curve to shift EXCEPT

An increase in aggregate demand will cause an increase in aggregate supply.

The model of aggregate supply and aggregate demand is based on the assumption that it is only wage changes, not price changes, that determine a firm's production and employment plans.

A rightward-shift of aggregate supply without any change 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

A fall in the price level

As consumers increase their planned spending

An increase in the price level in the United States would cause a

What two effects account for the downward slope of aggregate demand?

The equilibrium price level for our domestic economy occurs when the aggregate demand curve intersects the ___________ ___________ curve.

A decrease in the exchange value of the dollar will

How does a decrease in the foreign exchange value of the dollar affect aggregate demand?

How is aggregate demand affected if other countries become more prosperous?

The circular flow model represents the _________ market and the factor market.

The real balance effect and the open economy effect account for the downward slope of aggregate demand.

The circular flow model depicts exchanges of goods and money between the household sector and the _________ sector.

Aggregate supply is the total of all planned production for an economy over a specific time period.

The aggregate demand curve slopes

If the amount of goods supplied by firms exceeds planned spending then

An increase in aggregate supply causes the price level to _________ .

The upward slope of the supply curve is explained by

All of the following would cause the aggregate demand curve to shift EXCEPT

An increase in aggregate demand will cause an increase in aggregate supply.

The model of aggregate supply and aggregate demand is based on the assumption that it is only wage changes, not price changes, that determine a firm's production and employment plans.

A rightward-shift of aggregate supply without any change 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

The equilibrium price level for our domestic economy occurs when the aggregate demand curve intersects the _ _ curve.