Question 1

Figure 24-1
  
-Refer to Figure 24-1.Ceteris paribus,a decrease in interest rates 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 2

Figure 24-1
  
-Refer to Figure 24-1.Ceteris paribus,a decrease in the value of the domestic currency relative to foreign currencies 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 3

Potential GDP is also referred to as

Accepted Answer

A)  realized GDP. 
B)  full-employment GDP. 
C)  politico-economic GDP. 
D)  balanced-budget GDP. 
A)  realized GDP. 
B)  full-employment GDP. 
C)  politico-economic GDP. 
D)  balanced-budget GDP.

Question 4

Figure 24-2
  
-Refer to Figure 24-2.Ceteris paribus,a decrease in the labor force 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 5

Workers expect inflation to fall from 4% to 1% next year. As a result,this should

Accepted Answer

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

Question 6

The short-run aggregate supply curve has a

Accepted Answer

A)  negative slope. 
B)  positive slope. 
C)  slope equal to infinity. 
D)  slope equal to zero. 
A)  negative slope. 
B)  positive slope. 
C)  slope equal to infinity. 
D)  slope equal to zero.

Question 7

If aggregate demand just decreased,which of the following may have caused the decrease?

Accepted Answer

A)  a decrease in exports 
B)  a decrease in the interest rate 
C)  a decrease in the price level 
D)  a decrease in imports 
A)  a decrease in exports 
B)  a decrease in the interest rate 
C)  a decrease in the price level 
D)  a decrease in imports

Question 8

According to the "wealth effect",when the ________ falls,the ________ rises.

Accepted Answer

A)  inflation rate; nominal value of household assets 
B)  unemployment rate; average level of household income 
C)  price level; the nominal value of household wealth 
D)  price level; the real value of household wealth 
A)  inflation rate; nominal value of household assets 
B)  unemployment rate; average level of household income 
C)  price level; the nominal value of household wealth 
D)  price level; the real value of household wealth

Question 9

Figure 24-4
  
-Refer to Figure 24-4. In the figure above,AD₁, LRAS₁ and SRAS₁ denote AD,LRAS and SRAS in year 1,while AD₂,LRAS₂ and SRAS₂ denote AD,LRAS and SRAS in year 2. Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

Accepted Answer

A)  2.5% 
B)  7.3% 
C)  8.0% 
D)  10.0% 
A)  2.5% 
B)  7.3% 
C)  8.0% 
D)  10.0%

Question 10

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 11

When people became ________ concerned with the underlying value of their houses and became ________ with the expectations of the prices of their houses increasing,a housing bubble occurred.

Accepted Answer

A)  less; less 
B)  less; more 
C)  more; less 
D)  more; more 
A)  less; less 
B)  less; more 
C)  more; less 
D)  more; more

Question 12

An adverse supply shock causes the short-run aggregate supply curve to shift left,increasing the price level.

Accepted Answer

A) True 
 B)False

Question 13

The ________ curve has a positive slope because as prices of final goods and services rise,prices of inputs rise more slowly.

Accepted Answer

A)  short-run aggregate supply 
B)  long-run aggregate supply 
C)  short-run aggregate demand 
D)  long-run aggregate demand 
A)  short-run aggregate supply 
B)  long-run aggregate supply 
C)  short-run aggregate demand 
D)  long-run aggregate demand

Question 14

Inflation is generally the result of total spending growing slower than total production.

Accepted Answer

A) True 
 B)False

Question 15

The proponents of rational expectations and monetarism think that the Federal Reserve should adopt

Accepted Answer

A)  an inflation target. 
B)  a monetary aggregate target. 
C)  a constant monetary growth rule. 
D)  an interest rate target. 
A)  an inflation target. 
B)  a monetary aggregate target. 
C)  a constant monetary growth rule. 
D)  an interest rate target.

Question 16

Monetarists believe that the quantity of money should be increased at a constant rate.

Accepted Answer

A) True 
 B)False

Question 17

After an unexpected increase in the price of oil,the long-run adjustment ________ the price level and ________ the unemployment rate as they return to their original levels.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 18

Figure 24-4
  
-Refer to Figure 24-4. Given the economy is at point A in year 1,what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?

Accepted Answer

A)  0.3% 
B)  1.1% 
C)  2.7% 
D)  3.7% 
A)  0.3% 
B)  1.1% 
C)  2.7% 
D)  3.7%

Question 19

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

Accepted Answer

A)  Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B)  Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C)  Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D)  Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices. 
A)  Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B)  Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C)  Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D)  Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices.

Question 20

What does the phrase "Keynesian revolution" refer to?

Accepted Answer

The Keynesian revolution is th

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in interest rates would be represented by a movement from

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in the value of the domestic currency relative to foreign currencies would be represented by a movement from

Potential GDP is also referred to as

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in the labor force would be represented by a movement from

Workers expect inflation to fall from 4% to 1% next year. As a result,this should

The short-run aggregate supply curve has a

If aggregate demand just decreased,which of the following may have caused the decrease?

According to the "wealth effect",when the falls,the rises.

Figure 24-4 -Refer to Figure 24-4. In the figure above,AD₁, LRAS₁ and SRAS₁ denote AD,LRAS and SRAS in year 1,while AD₂,LRAS₂ and SRAS₂ denote AD,LRAS and SRAS in year 2. Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

A rapid increase in the price of oil will tend to

When people became concerned with the underlying value of their houses and became with the expectations of the prices of their houses increasing,a housing bubble occurred.

An adverse supply shock causes the short-run aggregate supply curve to shift left,increasing the price level.

The ________ curve has a positive slope because as prices of final goods and services rise,prices of inputs rise more slowly.

Inflation is generally the result of total spending growing slower than total production.

The proponents of rational expectations and monetarism think that the Federal Reserve should adopt

Monetarists believe that the quantity of money should be increased at a constant rate.

After an unexpected increase in the price of oil,the long-run adjustment the price level and the unemployment rate as they return to their original levels.

Figure 24-4 -Refer to Figure 24-4. Given the economy is at point A in year 1,what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

What does the phrase "Keynesian revolution" refer to?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 13: Aggregate Demand and Aggregate Supply Analysis

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in interest rates would be represented by a movement from

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in the value of the domestic currency relative to foreign currencies would be represented by a movement from

Potential GDP is also referred to as

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in the labor force would be represented by a movement from

Workers expect inflation to fall from 4% to 1% next year. As a result,this should

The short-run aggregate supply curve has a

If aggregate demand just decreased,which of the following may have caused the decrease?

According to the "wealth effect",when the ________ falls,the ________ rises.

Figure 24-4 -Refer to Figure 24-4. In the figure above,AD₁, LRAS₁ and SRAS₁ denote AD,LRAS and SRAS in year 1,while AD₂,LRAS₂ and SRAS₂ denote AD,LRAS and SRAS in year 2. Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

A rapid increase in the price of oil will tend to

When people became ________ concerned with the underlying value of their houses and became ________ with the expectations of the prices of their houses increasing,a housing bubble occurred.

An adverse supply shock causes the short-run aggregate supply curve to shift left,increasing the price level.

The ________ curve has a positive slope because as prices of final goods and services rise,prices of inputs rise more slowly.

Inflation is generally the result of total spending growing slower than total production.

The proponents of rational expectations and monetarism think that the Federal Reserve should adopt

Monetarists believe that the quantity of money should be increased at a constant rate.

After an unexpected increase in the price of oil,the long-run adjustment ________ the price level and ________ the unemployment rate as they return to their original levels.

Figure 24-4 -Refer to Figure 24-4. Given the economy is at point A in year 1,what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

What does the phrase "Keynesian revolution" refer to?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

According to the "wealth effect",when the falls,the rises.

When people became concerned with the underlying value of their houses and became with the expectations of the prices of their houses increasing,a housing bubble occurred.

After an unexpected increase in the price of oil,the long-run adjustment the price level and the unemployment rate as they return to their original levels.