Question 1

Which of the following shifts the aggregate supply curve leftward?

Accepted Answer

A)  increase in potential GDP 
B)  increase in the money wage rate 
C)  increase in real GDP 
D)  decrease in the money price of oil 
E)  a fall in the price level 
A)  increase in potential GDP 
B)  increase in the money wage rate 
C)  increase in real GDP 
D)  decrease in the money price of oil 
E)  a fall in the price level

Question 2

What is the effect on the aggregate demand curve from an increase in the price level?
 In particular, does the aggregate demand curve shift leftward or rightward?

Accepted Answer

When the price level increases, there is

Question 3

List three changes that lead to a shift of the aggregate supply curve.Discuss why each change shifts the aggregate supply curve and in which direction the curve shifts.

Accepted Answer

A change in potential GDP, a change in t

Question 4

Assume the economy is hit by a shock that decreases aggregate demand.When the economy has finally adjusted to full employment,

Accepted Answer

A)  only the level of real GDP will be affected. 
B)  there will be no changes to either the price level or real GDP. 
C)  only the price level will be affected. 
D)  both real GDP and the price level will be affected. 
E)  aggregate supply will not have changed. 
A)  only the level of real GDP will be affected. 
B)  there will be no changes to either the price level or real GDP. 
C)  only the price level will be affected. 
D)  both real GDP and the price level will be affected. 
E)  aggregate supply will not have changed.

Question 5

Which of the following statements is correct?

Accepted Answer

A)  The price level does not effect the level of real GDP demanded. 
B)  The lower the price level, the greater the quantity of real GDP demanded 
C)  The lower the price level, the more the aggregate demand curve shifts rightward. 
D)  The lower the price level, the more the aggregate demand curve shifts leftward. 
E)  The higher the price level, the more the aggregate demand curve shifts rightward. 
A)  The price level does not effect the level of real GDP demanded. 
B)  The lower the price level, the greater the quantity of real GDP demanded 
C)  The lower the price level, the more the aggregate demand curve shifts rightward. 
D)  The lower the price level, the more the aggregate demand curve shifts leftward. 
E)  The higher the price level, the more the aggregate demand curve shifts rightward.

Question 6

Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure

Accepted Answer

A)  shifts the aggregate demand curve by more than $10 billion. 
B)  shifts the aggregate demand curve by $10 billion. 
C)  shifts the aggregate demand curve by less than $10 billion. 
D)  changes the slope of the aggregate demand curve so it is less steep. 
E)  changes the slope of the aggregate demand curve so it is steeper. 
A)  shifts the aggregate demand curve by more than $10 billion. 
B)  shifts the aggregate demand curve by $10 billion. 
C)  shifts the aggregate demand curve by less than $10 billion. 
D)  changes the slope of the aggregate demand curve so it is less steep. 
E)  changes the slope of the aggregate demand curve so it is steeper.

Question 7

What is the aggregate demand multiplier and why does it occur?

Accepted Answer

The aggregate demand multiplier is an ef

Question 8

13.4 Chapter Figures
   
The figure above shows the aggregate supply curve and potential GDP.
-Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when

Accepted Answer

A)  the money wage rate rises. 
B)  the price level rises. 
C)  the money wage rate falls. 
D)  the price level falls. 
E)  both the price level and money wage rate rise by the same proportion. 
A)  the money wage rate rises. 
B)  the price level rises. 
C)  the money wage rate falls. 
D)  the price level falls. 
E)  both the price level and money wage rate rise by the same proportion.

Question 9

A change in any of the following factors EXCEPT ________ shifts the aggregate demand curve.

Accepted Answer

A)  expectations about the future 
B)  the money wage rate 
C)  monetary and fiscal policy 
D)  foreign income 
E)  the foreign exchange rate 
A)  expectations about the future 
B)  the money wage rate 
C)  monetary and fiscal policy 
D)  foreign income 
E)  the foreign exchange rate

Question 10

Define "stagflation" and explain how it can be created.

Accepted Answer

Stagflation is a combination of two word

Question 11

The government passes a law which doubles the wages of all workers.Aggregate supply will ________, and real GDP will ________, and the price level will ________.

Accepted Answer

A)  increase; remain the same; increase. 
B)  remain the same; increase; increase. 
C)  increase; increase; remain the same. 
D)  decrease; increase; increase. 
E)  decrease; decrease; increase. 
A)  increase; remain the same; increase. 
B)  remain the same; increase; increase. 
C)  increase; increase; remain the same. 
D)  decrease; increase; increase. 
E)  decrease; decrease; increase.

Question 12

At a price level of 100, John has savings equal to $20,000.If the price level increases to 130, the buying power of John's savings is approximately

Accepted Answer

A)  $12,780. 
B)  $15,400. 
C)  $20,000. 
D)  $26,000. 
E)  $30,000. 
A)  $12,780. 
B)  $15,400. 
C)  $20,000. 
D)  $26,000. 
E)  $30,000.

Question 13

The quantity of real GDP supplied increases when the price level increases because

Accepted Answer

A)  investment increases. 
B)  the quantity of money increases. 
C)  the real wage rate falls. 
D)  the real wage rate rises. 
E)  aggregate demand increases. 
A)  investment increases. 
B)  the quantity of money increases. 
C)  the real wage rate falls. 
D)  the real wage rate rises. 
E)  aggregate demand increases.

Question 14

In its macroeconomic equilibrium, the economy can be producing at i. below full employment.
Ii) full employment.
Iii) above full employment.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i or ii 
E)  i, ii, or iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i or ii 
E)  i, ii, or iii

Question 15

If the price level doubles, it will

Accepted Answer

A)  increase the quantity of money. 
B)  have no effect on the buying power of money. 
C)  decrease the buying power of money. 
D)  increase potential GDP. 
E)  decrease potential GDP. 
A)  increase the quantity of money. 
B)  have no effect on the buying power of money. 
C)  decrease the buying power of money. 
D)  increase potential GDP. 
E)  decrease potential GDP.

Question 16

Moving along the aggregate supply curve when the price level rises, the

Accepted Answer

A)  quantity supplied does not change because the aggregate supply curve is a vertical line. 
B)  the quantity supplied increases. 
C)  the quantity supplied decreases. 
D)  the aggregate demand curve shifts rightward. 
E)  the aggregate demand curve shifts leftward. 
A)  quantity supplied does not change because the aggregate supply curve is a vertical line. 
B)  the quantity supplied increases. 
C)  the quantity supplied decreases. 
D)  the aggregate demand curve shifts rightward. 
E)  the aggregate demand curve shifts leftward.

Question 17

The aggregate demand curve shifts when any of the following factors change EXCEPT

Accepted Answer

A)  foreign income. 
B)  the price level. 
C)  monetary policy. 
D)  expectations about the future. 
E)  fiscal policy. 
A)  foreign income. 
B)  the price level. 
C)  monetary policy. 
D)  expectations about the future. 
E)  fiscal policy.

Question 18

Starting from a situation of full employment, a decrease in aggregate demand ________ the price level, leading to ________.

Accepted Answer

A)  raises; an inflationary gap 
B)  lowers; a recessionary gap 
C)  raises; a recessionary gap 
D)  lowers; an inflationary gap 
E)  does not change; a decrease in potential GDP 
A)  raises; an inflationary gap 
B)  lowers; a recessionary gap 
C)  raises; a recessionary gap 
D)  lowers; an inflationary gap 
E)  does not change; a decrease in potential GDP

Question 19

-In the figure above, the economy is at an equilibrium with real GDP of $13 trillion and a price level of 110.As the economy moves toward its ultimate equilibrium, the ________ curve shifts ________.

Accepted Answer

A)  aggregate supply; leftward 
B)  aggregate supply; rightward 
C)  aggregate demand; rightward 
D)  aggregate demand; leftward 
E)  potential GDP; leftward 
A)  aggregate supply; leftward 
B)  aggregate supply; rightward 
C)  aggregate demand; rightward 
D)  aggregate demand; leftward 
E)  potential GDP; leftward

Question 20

Which of the following produces a movement along the aggregate demand curve and does not shift the aggregate demand curve?

Accepted Answer

A)  a change in foreign incomes 
B)  a change in the price level 
C)  a change in monetary policy 
D)  a change in expectations about the future 
E)  a change in government expenditures on goods and services 
A)  a change in foreign incomes 
B)  a change in the price level 
C)  a change in monetary policy 
D)  a change in expectations about the future 
E)  a change in government expenditures on goods and services

Which of the following shifts the aggregate supply curve leftward?

What is the effect on the aggregate demand curve from an increase in the price level? In particular, does the aggregate demand curve shift leftward or rightward?

List three changes that lead to a shift of the aggregate supply curve.Discuss why each change shifts the aggregate supply curve and in which direction the curve shifts.

Assume the economy is hit by a shock that decreases aggregate demand.When the economy has finally adjusted to full employment,

Which of the following statements is correct?

Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure

What is the aggregate demand multiplier and why does it occur?

13.4 Chapter Figures The figure above shows the aggregate supply curve and potential GDP. -Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when

A change in any of the following factors EXCEPT ________ shifts the aggregate demand curve.

Define "stagflation" and explain how it can be created.

The government passes a law which doubles the wages of all workers.Aggregate supply will , and real GDP will , and the price level will .

At a price level of 100, John has savings equal to $20,000.If the price level increases to 130, the buying power of John's savings is approximately

The quantity of real GDP supplied increases when the price level increases because

In its macroeconomic equilibrium, the economy can be producing at i. below full employment. Ii) full employment. Iii) above full employment.

If the price level doubles, it will

Moving along the aggregate supply curve when the price level rises, the

The aggregate demand curve shifts when any of the following factors change EXCEPT

Starting from a situation of full employment, a decrease in aggregate demand the price level, leading to .

-In the figure above, the economy is at an equilibrium with real GDP of $13 trillion and a price level of 110.As the economy moves toward its ultimate equilibrium, the curve shifts .

Which of the following produces a movement along the aggregate demand curve and does not shift the aggregate demand curve?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 13: Aggregate Supply and Aggregate Demand

Which of the following shifts the aggregate supply curve leftward?

What is the effect on the aggregate demand curve from an increase in the price level? In particular, does the aggregate demand curve shift leftward or rightward?

List three changes that lead to a shift of the aggregate supply curve.Discuss why each change shifts the aggregate supply curve and in which direction the curve shifts.

Assume the economy is hit by a shock that decreases aggregate demand.When the economy has finally adjusted to full employment,

Which of the following statements is correct?

Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure

What is the aggregate demand multiplier and why does it occur?

13.4 Chapter Figures The figure above shows the aggregate supply curve and potential GDP. -Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when

A change in any of the following factors EXCEPT ________ shifts the aggregate demand curve.

Define "stagflation" and explain how it can be created.

The government passes a law which doubles the wages of all workers.Aggregate supply will ________, and real GDP will ________, and the price level will ________.

At a price level of 100, John has savings equal to $20,000.If the price level increases to 130, the buying power of John's savings is approximately

The quantity of real GDP supplied increases when the price level increases because

In its macroeconomic equilibrium, the economy can be producing at i. below full employment. Ii) full employment. Iii) above full employment.

If the price level doubles, it will

Moving along the aggregate supply curve when the price level rises, the

The aggregate demand curve shifts when any of the following factors change EXCEPT

Starting from a situation of full employment, a decrease in aggregate demand ________ the price level, leading to ________.

-In the figure above, the economy is at an equilibrium with real GDP of $13 trillion and a price level of 110.As the economy moves toward its ultimate equilibrium, the ________ curve shifts ________.

Which of the following produces a movement along the aggregate demand curve and does not shift the aggregate demand curve?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

The government passes a law which doubles the wages of all workers.Aggregate supply will , and real GDP will , and the price level will .

Starting from a situation of full employment, a decrease in aggregate demand the price level, leading to .

-In the figure above, the economy is at an equilibrium with real GDP of $13 trillion and a price level of 110.As the economy moves toward its ultimate equilibrium, the curve shifts .