Question 1

Aggregate supply describes a relationship between:

Accepted Answer

A)  spending and income. 
B)  output and prices. 
C)  costs and revenue. 
D)  spending and output. 
E)  spending and prices. 
A)  spending and income. 
B)  output and prices. 
C)  costs and revenue. 
D)  spending and output. 
E)  spending and prices.

Question 2

Suppose people are worried about losing their jobs.In the short run,this will:

Accepted Answer

A)  decrease short-run aggregate supply and output. 
B)  decrease aggregate demand and output. 
C)  decrease aggregate demand and short-run aggregate supply. 
D)  decrease output and increase the price level. 
E)  increase saving and increase aggregate demand. 
A)  decrease short-run aggregate supply and output. 
B)  decrease aggregate demand and output. 
C)  decrease aggregate demand and short-run aggregate supply. 
D)  decrease output and increase the price level. 
E)  increase saving and increase aggregate demand.

Question 3

Aggregate demand is about ________ and aggregate supply is about ________.

Accepted Answer

A)  income; spending 
B)  spending; production 
C)  production; spending 
D)  production; income 
E)  saving; profit 
A)  income; spending 
B)  spending; production 
C)  production; spending 
D)  production; income 
E)  saving; profit

Question 4

How many recessions have there been in the United States since 1982?

Accepted Answer

A)  none 
B)  one 
C)  two 
D)  three 
E)  four 
A)  none 
B)  one 
C)  two 
D)  three 
E)  four

Question 5

Explain the difference between the short-run and long-run aggregate supply curves.

Accepted Answer

In the long run,output moves toward full

Question 6

If people expect higher income in the future,then spending today ________ and aggregate demand ________.

Accepted Answer

A)  increases; is unaffected 
B)  increases; increases 
C)  increases; decreases 
D)  decreases; decreases 
E)  is unaffected; is unaffected 
A)  increases; is unaffected 
B)  increases; increases 
C)  increases; decreases 
D)  decreases; decreases 
E)  is unaffected; is unaffected

Question 7

Refer to the following figure to answer the questions that follow.
  
-Based on the figure,if the economy starts at point A and ends up at point E,then in the short run,there was a(n):

Accepted Answer

A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  decrease in short-run aggregate supply. 
D)  increase in short-run aggregate supply. 
E)  increase in long-run aggregate supply. 
A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  decrease in short-run aggregate supply. 
D)  increase in short-run aggregate supply. 
E)  increase in long-run aggregate supply.

Question 8

Use the following graph to answer the questions that follow. This graph depicts an economy where aggregate demand has decreased, with no change in either short-run aggregate supply (SRAS) or long-run aggregate supply (LRAS).
  
-The graph accurately summarizes what happened during the Great Depression,because during that time,the price level ________ and real gross domestic product (GDP)________.

Accepted Answer

A)  decreased; decreased 
B)  increased; decreased 
C)  remained unchanged; remained unchanged 
D)  decreased; increased 
E)  remained unchanged; decreased 
A)  decreased; decreased 
B)  increased; decreased 
C)  remained unchanged; remained unchanged 
D)  decreased; increased 
E)  remained unchanged; decreased

Question 9

Provide evidence that the economic contraction from July 1981 to November 1982 was very similar to the Great Recession.

Accepted Answer

First,consider real gross domestic produ

Question 10

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Accepted Answer

A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs. 
A)  business cycles. 
B)  economic contractions. 
C)  economic expansions. 
D)  economic peaks. 
E)  economic troughs.

Question 11

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the questions that follow.
  
-In what quarter did this economy enter a recession?

Accepted Answer

A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9 
A)  quarter 5 
B)  quarter 6 
C)  quarter 7 
D)  quarter 8 
E)  quarter 9

Question 12

Explain and illustrate how the long-run equilibrium levels of output and the price level are affected by a technological advance that increases labor productivity.

Accepted Answer

A technological advance that increases l

Question 13

Shifts in the short-run aggregate supply curve are caused by:

Accepted Answer

A)  supply shocks. 
B)  menu costs. 
C)  money illusion. 
D)  changes in labor productivity. 
E)  changes in spending. 
A)  supply shocks. 
B)  menu costs. 
C)  money illusion. 
D)  changes in labor productivity. 
E)  changes in spending.

Question 14

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will ________ and aggregate demand will ________.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; be unaffected 
D)  increase; decrease 
E)  increase; increase 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; be unaffected 
D)  increase; decrease 
E)  increase; increase

Question 15

Recognition lag,implementation lag,and impact lag are all examples of:

Accepted Answer

A)  crowding-out. 
B)  savings shifts. 
C)  time lags that accompany policy decisions. 
D)  automatic stabilizers. 
E)  fiscal policies. 
A)  crowding-out. 
B)  savings shifts. 
C)  time lags that accompany policy decisions. 
D)  automatic stabilizers. 
E)  fiscal policies.

Question 16

If the economy is expanding beyond its long-run capabilities,we know that:

Accepted Answer

A)  we are in a depression. 
B)  we are in a recession. 
C)  actual unemployment is above its natural rate. 
D)  actual unemployment is at its natural rate. 
E)  actual unemployment is less than its natural rate. 
A)  we are in a depression. 
B)  we are in a recession. 
C)  actual unemployment is above its natural rate. 
D)  actual unemployment is at its natural rate. 
E)  actual unemployment is less than its natural rate.

Question 17

What is the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve? Explain in terms of what causes a movement and what causes a shift.

Accepted Answer

A movement along the aggregate demand cu

Question 18

When inflation pushes up prices in the economy,input prices are ________ and revenues ________ in the short run.

Accepted Answer

A)  flexible; remain unchanged 
B)  sticky; increase 
C)  sticky; remain unchanged 
D)  flexible; decrease 
E)  flexible; increase 
A)  flexible; remain unchanged 
B)  sticky; increase 
C)  sticky; remain unchanged 
D)  flexible; decrease 
E)  flexible; increase

Question 19

Refer to the following figure to answer the questions that follow.
  
-Based on the figure,which points represent long-run equilibrium?

Accepted Answer

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

Question 20

Which of the following is true about the price level and aggregate supply?

Accepted Answer

A)  The price level influences aggregate supply in both the long run and short run. 
B)  The price level influences aggregate supply in the long run but not in the short run. 
C)  The price level influences aggregate supply in the short run but not in the long run. 
D)  The price level never impacts aggregate supply. 
E)  There is no clear relationship between the price level and aggregate supply. 
A)  The price level influences aggregate supply in both the long run and short run. 
B)  The price level influences aggregate supply in the long run but not in the short run. 
C)  The price level influences aggregate supply in the short run but not in the long run. 
D)  The price level never impacts aggregate supply. 
E)  There is no clear relationship between the price level and aggregate supply.

Aggregate supply describes a relationship between:

Suppose people are worried about losing their jobs.In the short run,this will:

Aggregate demand is about and aggregate supply is about .

How many recessions have there been in the United States since 1982?

Explain the difference between the short-run and long-run aggregate supply curves.

If people expect higher income in the future,then spending today and aggregate demand .

Refer to the following figure to answer the questions that follow. -Based on the figure,if the economy starts at point A and ends up at point E,then in the short run,there was a(n):

Provide evidence that the economic contraction from July 1981 to November 1982 was very similar to the Great Recession.

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the questions that follow. -In what quarter did this economy enter a recession?

Explain and illustrate how the long-run equilibrium levels of output and the price level are affected by a technological advance that increases labor productivity.

Shifts in the short-run aggregate supply curve are caused by:

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will and aggregate demand will .

Recognition lag,implementation lag,and impact lag are all examples of:

If the economy is expanding beyond its long-run capabilities,we know that:

What is the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve? Explain in terms of what causes a movement and what causes a shift.

When inflation pushes up prices in the economy,input prices are and revenues in the short run.

Refer to the following figure to answer the questions that follow. -Based on the figure,which points represent long-run equilibrium?

Which of the following is true about the price level and aggregate supply?

Thinking Like an Economist

Economic Models and Gains From Trade

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters

Exam 12: Aggregate Demand and Aggregate Supply

Aggregate supply describes a relationship between:

Suppose people are worried about losing their jobs.In the short run,this will:

Aggregate demand is about ________ and aggregate supply is about ________.

How many recessions have there been in the United States since 1982?

Explain the difference between the short-run and long-run aggregate supply curves.

If people expect higher income in the future,then spending today ________ and aggregate demand ________.

Refer to the following figure to answer the questions that follow. -Based on the figure,if the economy starts at point A and ends up at point E,then in the short run,there was a(n):

Provide evidence that the economic contraction from July 1981 to November 1982 was very similar to the Great Recession.

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called:

Consider the following data that identifies real GDP in comparison to the long-run trend of real GDP to answer the questions that follow. -In what quarter did this economy enter a recession?

Explain and illustrate how the long-run equilibrium levels of output and the price level are affected by a technological advance that increases labor productivity.

Shifts in the short-run aggregate supply curve are caused by:

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will ________ and aggregate demand will ________.

Recognition lag,implementation lag,and impact lag are all examples of:

If the economy is expanding beyond its long-run capabilities,we know that:

What is the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve? Explain in terms of what causes a movement and what causes a shift.

When inflation pushes up prices in the economy,input prices are ________ and revenues ________ in the short run.

Refer to the following figure to answer the questions that follow. -Based on the figure,which points represent long-run equilibrium?

Which of the following is true about the price level and aggregate supply?

Thinking Like an Economist

Economic Models and Gains From Trade

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters

Aggregate demand is about and aggregate supply is about .

If people expect higher income in the future,then spending today and aggregate demand .

You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will and aggregate demand will .

When inflation pushes up prices in the economy,input prices are and revenues in the short run.