Question 1

________ of unemployment during ________ make it easier for workers to ________ wages.

Accepted Answer

A) High levels; a recession; accept lower 
B) Low levels; an expansion; accept lower 
C) Low levels; a recession; negotiate higher 
D) High levels; an expansion; negotiate higher 
A) High levels; a recession; accept lower 
B) Low levels; an expansion; accept lower 
C) Low levels; a recession; negotiate higher 
D) High levels; an expansion; negotiate higher

Question 2

When the aggregate demand curve and the short-run aggregate supply curve intersect

Accepted Answer

A) the long-run aggregate supply curve must also intersect at the same point. 
B) inflation must be increasing. 
C) structural and frictional unemployment equal zero. 
D) the economy is in short-run macroeconomic equilibrium. 
A) the long-run aggregate supply curve must also intersect at the same point. 
B) inflation must be increasing. 
C) structural and frictional unemployment equal zero. 
D) the economy is in short-run macroeconomic equilibrium.

Question 3

Figure 15-1
  
-Refer to Figure 15-1.Ceteris paribus,a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from

Accepted Answer

A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A. 
A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A.

Question 4

If workers leave a country to seek out better opportunities in another country,then this will

Accepted Answer

A) shift the short-run aggregate supply curve of the original country to the left. 
B) shift the short-run aggregate supply curve of the original country to the right. 
C) move the original economy up along a stationary short-run aggregate supply curve. 
D) move the original economy down along a stationary short-run aggregate supply curve. 
A) shift the short-run aggregate supply curve of the original country to the left. 
B) shift the short-run aggregate supply curve of the original country to the right. 
C) move the original economy up along a stationary short-run aggregate supply curve. 
D) move the original economy down along a stationary short-run aggregate supply curve.

Question 5

What is a supply shock,and why might a supply shock lead to stagflation?

Accepted Answer

A supply shock is an unexpected event th

Question 6

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

Accepted Answer

A) business fixed investment spending rose and net export spending declined 
B) consumption spending rose and residential construction spending declined 
C) federal government purchases rose and changes in business inventories declined 
D) net export spending rose and consumption spending declined 
A) business fixed investment spending rose and net export spending declined 
B) consumption spending rose and residential construction spending declined 
C) federal government purchases rose and changes in business inventories declined 
D) net export spending rose and consumption spending declined

Question 7

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Accepted Answer

@#IMG-DLM& The economy is at point A with the pric

Question 8

Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run.

Accepted Answer

@#IMG-DLM& If the aggregate demand curve shifts to

Question 9

Explain the three reasons the aggregate demand curve slopes downward.

Accepted Answer

The three reasons are the wealth effect,

Question 10

A decrease in disposable income will shift the aggregate demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 11

Figure 15-1
  
-Refer to Figure 15-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Accepted Answer

A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A. 
A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A.

Question 12

Stagflation usually results from

Accepted Answer

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

Question 13

Article Summary
According to the International Energy Agency (IEA), increased oil production resulting from U.S. shale oil has invigorated the North American oil industry and has created a global supply shock. The shale oil and gas industry has generated tens of billions of dollars in revenues and hundreds of thousands of new jobs, and could result in the United States changing from being the world's largest oil importer to a net exporter within a few years. An IEA forecast predicts that because of shale oil, the United States will become the world's largest oil producer by 2017, with supply growing by 3.9 million barrels per day from 2012-2018.

-Refer to the Article Summary.The supply shock mentioned in the article summary may well result in a decrease in the price of oil.When the price of oil falls unexpectedly,the equilibrium price level ________ and the unemployment rate ________ in the short run.

Accepted Answer

A) rises; falls 
B) rises; rises 
C) falls; falls 
D) falls; rises 
A) rises; falls 
B) rises; rises 
C) falls; falls 
D) falls; rises

Question 14

Ceteris paribus,in the long run,a negative supply shock causes

Accepted Answer

A) the long-run aggregate supply curve to shift to the left. 
B) the price level to rise initially, and then return to its lower level. 
C) unemployment to fall below its short-run level. 
D) equilibrium real GDP to fall. 
A) the long-run aggregate supply curve to shift to the left. 
B) the price level to rise initially, and then return to its lower level. 
C) unemployment to fall below its short-run level. 
D) equilibrium real GDP to fall.

Question 15

Which aggregate supply curve has a positive slope?

Accepted Answer

A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run 
A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run

Question 16

A supply shock causes the long-run aggregate supply curve to shift left,decreasing the price level.

Accepted Answer

A) True 
 B)False

Question 17

Figure 15-1
  
-Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

Accepted Answer

A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A. 
A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A.

Question 18

Figure 15-2
  
-Refer to Figure 15-2.Ceteris paribus,an increase in the price level would be represented by a movement from

Accepted Answer

A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A. 
A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A.

Question 19

A rapid increase in the price of oil will tend to

Accepted Answer

A) shift short-run aggregate supply to the left. 
B) shift long-run aggregate supply to the left. 
C) shift long-run aggregate supply to the right. 
D) shift aggregate demand to the right. 
A) shift short-run aggregate supply to the left. 
B) shift long-run aggregate supply to the left. 
C) shift long-run aggregate supply to the right. 
D) shift aggregate demand to the right.

Question 20

Figure 15-2
  
-Refer to Figure 15-2.Ceteris paribus,an increase in the capital stock would be represented by a movement from

Accepted Answer

A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A. 
A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A.

of unemployment during make it easier for workers to wages.

When the aggregate demand curve and the short-run aggregate supply curve intersect

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from

If workers leave a country to seek out better opportunities in another country,then this will

What is a supply shock,and why might a supply shock lead to stagflation?

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run.

Explain the three reasons the aggregate demand curve slopes downward.

A decrease in disposable income will shift the aggregate demand curve to the left.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Stagflation usually results from

Ceteris paribus,in the long run,a negative supply shock causes

Which aggregate supply curve has a positive slope?

A supply shock causes the long-run aggregate supply curve to shift left,decreasing the price level.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in the price level would be represented by a movement from

A rapid increase in the price of oil will tend to

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in the capital stock would be represented by a movement from

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 15: Aggregate Demand and Aggregate Supply Analysis

________ of unemployment during ________ make it easier for workers to ________ wages.

When the aggregate demand curve and the short-run aggregate supply curve intersect

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from

If workers leave a country to seek out better opportunities in another country,then this will

What is a supply shock,and why might a supply shock lead to stagflation?

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run.

Explain the three reasons the aggregate demand curve slopes downward.

A decrease in disposable income will shift the aggregate demand curve to the left.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Stagflation usually results from

Ceteris paribus,in the long run,a negative supply shock causes

Which aggregate supply curve has a positive slope?

A supply shock causes the long-run aggregate supply curve to shift left,decreasing the price level.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in the price level would be represented by a movement from

A rapid increase in the price of oil will tend to

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in the capital stock would be represented by a movement from

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

of unemployment during make it easier for workers to wages.