Question 1

An increase in the price level causes a movement down the aggregate demand curve.

Accepted Answer

A) True 
 B)False

Question 2

Stagflation is often a result of

Accepted Answer

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

Question 3

Explain how each of the following events would affect the short-run aggregate supply curve.
a.A decrease in the price level
b.A decrease in what the price level is expected to be in the future
c.A price level that is currently lower than expected
d.An unexpected decrease in the price of an important raw material
e.A decrease in the labor force

Accepted Answer

a.A lower price level would cause a move

Question 4

The main result of the monetarist model is that

Accepted Answer

A)  workers and firms have rational expectations. 
B)  the quantity of money should be increased at a constant rate. 
C)  productivity shocks explain fluctuations in real GDP. 
D)  the economy is slow to adjust to sticky wages and prices. 
A)  workers and firms have rational expectations. 
B)  the quantity of money should be increased at a constant rate. 
C)  productivity shocks explain fluctuations in real GDP. 
D)  the economy is slow to adjust to sticky wages and prices.

Question 5

Figure 24-3
  
-Refer to Figure 24-3. Which of the points in the above graph are possible short-run equilibria?

Accepted Answer

A)  A and B 
B)  A and C 
C)  A and D 
D)  A, B, C, and D 
A)  A and B 
B)  A and C 
C)  A and D 
D)  A, B, C, and D

Question 6

When the price level in the United States rises relative to the price level of other countries,________ will rise,________ will fall,and ________ will fall.

Accepted Answer

A)  imports; exports; net exports 
B)  exports; imports; net exports 
C)  net exports; exports; imports 
D)  net exports; imports; exports 
A)  imports; exports; net exports 
B)  exports; imports; net exports 
C)  net exports; exports; imports 
D)  net exports; imports; exports

Question 7

Figure 24-2
  
-Refer to Figure 24-2.Ceteris paribus,a decrease in the expected price of an important natural resource 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 8

According to the real business cycle model

Accepted Answer

A)  increases in aggregate demand raise GDP. 
B)  increases in aggregate demand lower GDP. 
C)  increases in aggregate demand do not affect GDP. 
D)  increases in aggregate demand lower the price level. 
A)  increases in aggregate demand raise GDP. 
B)  increases in aggregate demand lower GDP. 
C)  increases in aggregate demand do not affect GDP. 
D)  increases in aggregate demand lower the price level.

Question 9

The short-run aggregate supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 10

The level of long-run aggregate supply is affected by all of the following except

Accepted Answer

A)  changes in the price level. 
B)  changes in the technology. 
C)  changes in the capital stock. 
D)  changes in the number of workers. 
A)  changes in the price level. 
B)  changes in the technology. 
C)  changes in the capital stock. 
D)  changes in the number of workers.

Question 11

Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?

Accepted Answer

A)  the leftward shift of the short-run aggregate supply curve that occurs after a recession 
B)  the rightward shift of the short-run aggregate supply curve that occurs after a recession 
C)  the leftward shift of the aggregate demand curve that occurs after a recession 
D)  the rightward shift of the aggregate demand curve that occurs after a recession 
A)  the leftward shift of the short-run aggregate supply curve that occurs after a recession 
B)  the rightward shift of the short-run aggregate supply curve that occurs after a recession 
C)  the leftward shift of the aggregate demand curve that occurs after a recession 
D)  the rightward shift of the aggregate demand curve that occurs after a recession

Question 12

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 13

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Accepted Answer

A)  Increases in the price level lower the interest rate and decrease consumption spending. 
B)  Increases in the price level lower the interest rate and decrease investment spending. 
C)  Increases in the U.S. price level relative to the price level in other countries lowers net exports. 
D)  Increases in the price level raise real wealth and lowers consumption spending. 
A)  Increases in the price level lower the interest rate and decrease consumption spending. 
B)  Increases in the price level lower the interest rate and decrease investment spending. 
C)  Increases in the U.S. price level relative to the price level in other countries lowers net exports. 
D)  Increases in the price level raise real wealth and lowers consumption spending.

Question 14

Just before,during,and after the recession of 2007-2009,net exports in the United States

Accepted Answer

A)  fell and remained negative 
B)  fell, but remained positive 
C)  rose and became positive. 
D)  rose, but remained negative. 
A)  fell and remained negative 
B)  fell, but remained positive 
C)  rose and became positive. 
D)  rose, but remained negative.

Question 15

Inflation will

Accepted Answer

A)  increase aggregate demand. 
B)  increase the quantity of real GDP demanded. 
C)  decrease aggregate demand. 
D)  decrease the quantity of real GDP demanded. 
A)  increase aggregate demand. 
B)  increase the quantity of real GDP demanded. 
C)  decrease aggregate demand. 
D)  decrease the quantity of real GDP demanded.

Question 16

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing faster than potential real GDP?

Accepted Answer

Aggregate demand inc

Question 17

Figure 24-3
  
-Refer to Figure 24-3. Which of the points in the above graph are possible long-run equilibria?

Accepted Answer

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

Question 18

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run?

Accepted Answer

A)  Output will rise. 
B)  Prices will rise. 
C)  Unemployment will rise. 
D)  The aggregate demand curve will shift to the right. 
A)  Output will rise. 
B)  Prices will rise. 
C)  Unemployment will rise. 
D)  The aggregate demand curve will shift to the right.

Question 19

Figure 24-1
  
-Refer to Figure 24-1.Ceteris paribus,a decrease 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 20

On the long-run aggregate supply curve,

Accepted Answer

A)  an increase in the price level increases the aggregate quantity of GDP supplied. 
B)  an increase in the price level reduces the aggregate quantity of GDP supplied. 
C)  an increase in the price level has no effect on the aggregate quantity of GDP supplied. 
D)  an increase in the price level increases the level of potential GDP. 
A)  an increase in the price level increases the aggregate quantity of GDP supplied. 
B)  an increase in the price level reduces the aggregate quantity of GDP supplied. 
C)  an increase in the price level has no effect on the aggregate quantity of GDP supplied. 
D)  an increase in the price level increases the level of potential GDP.

An increase in the price level causes a movement down the aggregate demand curve.

Stagflation is often a result of

The main result of the monetarist model is that

Figure 24-3 -Refer to Figure 24-3. Which of the points in the above graph are possible short-run equilibria?

When the price level in the United States rises relative to the price level of other countries, will rise, will fall,and will fall.

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in the expected price of an important natural resource would be represented by a movement from

According to the real business cycle model

The short-run aggregate supply curve is vertical.

The level of long-run aggregate supply is affected by all of the following except

Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?

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

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Just before,during,and after the recession of 2007-2009,net exports in the United States

Inflation will

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing faster than potential real GDP?

Figure 24-3 -Refer to Figure 24-3. Which of the points in the above graph are possible long-run equilibria?

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run?

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in households' expectations of their future income would be represented by a movement from

On the long-run aggregate supply curve,

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

An increase in the price level causes a movement down the aggregate demand curve.

Stagflation is often a result of

The main result of the monetarist model is that

Figure 24-3 -Refer to Figure 24-3. Which of the points in the above graph are possible short-run equilibria?

When the price level in the United States rises relative to the price level of other countries,________ will rise,________ will fall,and ________ will fall.

Figure 24-2 -Refer to Figure 24-2.Ceteris paribus,a decrease in the expected price of an important natural resource would be represented by a movement from

According to the real business cycle model

The short-run aggregate supply curve is vertical.

The level of long-run aggregate supply is affected by all of the following except

Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?

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

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Just before,during,and after the recession of 2007-2009,net exports in the United States

Inflation will

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing faster than potential real GDP?

Figure 24-3 -Refer to Figure 24-3. Which of the points in the above graph are possible long-run equilibria?

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run?

Figure 24-1 -Refer to Figure 24-1.Ceteris paribus,a decrease in households' expectations of their future income would be represented by a movement from

On the long-run aggregate supply curve,

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

When the price level in the United States rises relative to the price level of other countries, will rise, will fall,and will fall.