Question 1

-The curve labeled A in the above figure is

Accepted Answer

A)  a short-run aggregate supply curve. 
B)  an aggregate demand curve. 
C)  a long-run aggregate supply curve. 
D)  a production possibilities curve. 
A)  a short-run aggregate supply curve. 
B)  an aggregate demand curve. 
C)  a long-run aggregate supply curve. 
D)  a production possibilities curve.

Question 2

The short-run aggregate supply curve shifts leftward when the

Accepted Answer

A)  price level increases. 
B)  general level of technology advances. 
C)  money wage rate increases. 
D)  availability of on-the-job training expands to all workers. 
A)  price level increases. 
B)  general level of technology advances. 
C)  money wage rate increases. 
D)  availability of on-the-job training expands to all workers.

Question 3

The short-run aggregate supply curve

Accepted Answer

A)  is vertical. 
B)  shows the impact changes in the price level have on the quantity of real GDP when resource prices are constant. 
C)  illustrates the level of potential real GDP. 
D)  shifts whenever the price level changes. 
A)  is vertical. 
B)  shows the impact changes in the price level have on the quantity of real GDP when resource prices are constant. 
C)  illustrates the level of potential real GDP. 
D)  shifts whenever the price level changes.

Question 4

Which of the following changes would NOT shift the aggregate demand curve?

Accepted Answer

A)  a change in fiscal policy 
B)  a change in monetary policy 
C)  a change in expectations about future income 
D)  an increase in technology 
A)  a change in fiscal policy 
B)  a change in monetary policy 
C)  a change in expectations about future income 
D)  an increase in technology

Question 5

Which of the following occurs while moving along a short-run aggregate supply curve?

Accepted Answer

A)  The money wage rate and the price level change by the same percentage. 
B)  The money wage rate changes and the price level is constant. 
C)  The price level changes and the money wage rate is constant. 
D)  Neither the price level nor the money wage rate changes. 
A)  The money wage rate and the price level change by the same percentage. 
B)  The money wage rate changes and the price level is constant. 
C)  The price level changes and the money wage rate is constant. 
D)  Neither the price level nor the money wage rate changes.

Question 6

What happens if the economy is at its long-run equilibrium and aggregate demand increases?

Accepted Answer

The increase in aggregate demand means t

Question 7

-In the above figure,when the economy is in a long-run equilibrium,the price level will be

Accepted Answer

A)  90. 
B)  100. 
C)  110. 
D)  120. 
A)  90. 
B)  100. 
C)  110. 
D)  120.

Question 8

According to the intertemporal substitution effect,when the price level increases,the interest rate

Accepted Answer

A)  rises and the quantity of real GDP demanded increases. 
B)  rises and the quantity of real GDP demanded decreases. 
C)  falls and the quantity of real GDP demanded decreases. 
D)  is not affected. 
A)  rises and the quantity of real GDP demanded increases. 
B)  rises and the quantity of real GDP demanded decreases. 
C)  falls and the quantity of real GDP demanded decreases. 
D)  is not affected.

Question 9

If the price level in Great Britain increases from 102 to 105 (holding all else constant),real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.

Accepted Answer

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

Question 10

An increase in the quantity of money shifts the aggregate demand curve rightward.

Accepted Answer

A) True 
 B)False

Question 11

-In the figure above,the economy is at point A when the price level rises to 120.Money wage rates and other resource prices remain constant.Firms are willing to supply output equal to

Accepted Answer

A)  $12.5 trillion. 
B)  $13.0 trillion. 
C)  $13.5 trillion. 
D)  None of the above answers is correct. 
A)  $12.5 trillion. 
B)  $13.0 trillion. 
C)  $13.5 trillion. 
D)  None of the above answers is correct.

Question 12

-In the above figure,the short-run equilibrium will eventually adjust to a long-run equilibrium with a

Accepted Answer

A)  lower price level and smaller real GDP 
B)  higher price level and larger real GDP. 
C)  higher price level and smaller real GDP. 
D)  lower price level and larger real GDP. 
A)  lower price level and smaller real GDP 
B)  higher price level and larger real GDP. 
C)  higher price level and smaller real GDP. 
D)  lower price level and larger real GDP.

Question 13

A rise in the price level changes aggregate demand because

Accepted Answer

A)  firms increase their investment when prices are higher. 
B)  the real value of people's wealth varies directly with the price level and so does their spending. 
C)  the real value of people's wealth decreases and so they decrease their consumption. 
D)  the more money people have, the more it is worth and hence the more goods and services they demand. 
A)  firms increase their investment when prices are higher. 
B)  the real value of people's wealth varies directly with the price level and so does their spending. 
C)  the real value of people's wealth decreases and so they decrease their consumption. 
D)  the more money people have, the more it is worth and hence the more goods and services they demand.

Question 14

-In the above figure,the aggregate demand curve is AD₂,so the short-run equilibrium level of real GDP is

Accepted Answer

A)  $13 trillion. 
B)  $13.5 trillion. 
C)  more than $13 and less than $13.5 trillion. 
D)  None of the above answers is correct. 
A)  $13 trillion. 
B)  $13.5 trillion. 
C)  more than $13 and less than $13.5 trillion. 
D)  None of the above answers is correct.

Question 15

The aggregate demand curve

Accepted Answer

A)  has a negative slope. 
B)  has a positive slope. 
C)  is vertical. 
D)  is horizontal. 
A)  has a negative slope. 
B)  has a positive slope. 
C)  is vertical. 
D)  is horizontal.

Question 16

When the labor market is at full employment,

Accepted Answer

A)  real GDP equals potential GDP. 
B)  the price level is stable. 
C)  the price level equals the potential price level. 
D)  the SAS curve is horizontal. 
A)  real GDP equals potential GDP. 
B)  the price level is stable. 
C)  the price level equals the potential price level. 
D)  the SAS curve is horizontal.

Question 17

Which of the following events will increase short-run aggregate supply?

Accepted Answer

A)  an advance in technology 
B)  an increase in resource prices 
C)  an increase in the natural unemployment rate 
D)  an increase in foreign income 
A)  an advance in technology 
B)  an increase in resource prices 
C)  an increase in the natural unemployment rate 
D)  an increase in foreign income

Question 18

-The curve labeled A in the above figure is a

Accepted Answer

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

Question 19

An above full-employment equilibrium is

Accepted Answer

A)  a theoretical possibility but cannot happen in reality. 
B)  the equilibrium in which the economy is in most of the time. 
C)  when real GDP exceeds potential GDP. 
D)  the period of time when prices are falling. 
A)  a theoretical possibility but cannot happen in reality. 
B)  the equilibrium in which the economy is in most of the time. 
C)  when real GDP exceeds potential GDP. 
D)  the period of time when prices are falling.

Question 20

Which of the following directly shifts the short-run aggregate supply curve?

Accepted Answer

A)  a change in aggregate demand 
B)  a change in the price level 
C)  a change in resource prices 
D)  all of the above 
A)  a change in aggregate demand 
B)  a change in the price level 
C)  a change in resource prices 
D)  all of the above

-The curve labeled A in the above figure is

The short-run aggregate supply curve shifts leftward when the

The short-run aggregate supply curve

Which of the following changes would NOT shift the aggregate demand curve?

Which of the following occurs while moving along a short-run aggregate supply curve?

What happens if the economy is at its long-run equilibrium and aggregate demand increases?

-In the above figure,when the economy is in a long-run equilibrium,the price level will be

According to the intertemporal substitution effect,when the price level increases,the interest rate

If the price level in Great Britain increases from 102 to 105 (holding all else constant),real wealth and there is a movement along Great Britain's aggregate demand curve.

An increase in the quantity of money shifts the aggregate demand curve rightward.

-In the figure above,the economy is at point A when the price level rises to 120.Money wage rates and other resource prices remain constant.Firms are willing to supply output equal to

-In the above figure,the short-run equilibrium will eventually adjust to a long-run equilibrium with a

A rise in the price level changes aggregate demand because

-In the above figure,the aggregate demand curve is AD₂,so the short-run equilibrium level of real GDP is

The aggregate demand curve

When the labor market is at full employment,

Which of the following events will increase short-run aggregate supply?

-The curve labeled A in the above figure is a

An above full-employment equilibrium is

Which of the following directly shifts the short-run aggregate supply curve?

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 10: Aggregate Supply and Aggregate Demand

-The curve labeled A in the above figure is

The short-run aggregate supply curve shifts leftward when the

The short-run aggregate supply curve

Which of the following changes would NOT shift the aggregate demand curve?

Which of the following occurs while moving along a short-run aggregate supply curve?

What happens if the economy is at its long-run equilibrium and aggregate demand increases?

-In the above figure,when the economy is in a long-run equilibrium,the price level will be

According to the intertemporal substitution effect,when the price level increases,the interest rate

If the price level in Great Britain increases from 102 to 105 (holding all else constant),real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve.

An increase in the quantity of money shifts the aggregate demand curve rightward.

-In the figure above,the economy is at point A when the price level rises to 120.Money wage rates and other resource prices remain constant.Firms are willing to supply output equal to

-In the above figure,the short-run equilibrium will eventually adjust to a long-run equilibrium with a

A rise in the price level changes aggregate demand because

-In the above figure,the aggregate demand curve is AD₂,so the short-run equilibrium level of real GDP is

The aggregate demand curve

When the labor market is at full employment,

Which of the following events will increase short-run aggregate supply?

-The curve labeled A in the above figure is a

An above full-employment equilibrium is

Which of the following directly shifts the short-run aggregate supply curve?

What Is Economics

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

If the price level in Great Britain increases from 102 to 105 (holding all else constant),real wealth and there is a movement along Great Britain's aggregate demand curve.