Question 1

In the United States,of the following decades economic growth was most rapid during the ________.

Accepted Answer

A)  1960s 
B)  1990s 
C)  1970s 
D)  2000s 
A)  1960s 
B)  1990s 
C)  1970s 
D)  2000s

Question 2

Suppose there is a temporary increase in the price of oil.This is represented by

Accepted Answer

A)  a leftward shift of the SAS and the LAS curve. 
B)  a leftward shift of the LAS curve. 
C)  a rightward shift of the SAS curve. 
D)  a leftward shift of the SAS curve. 
A)  a leftward shift of the SAS and the LAS curve. 
B)  a leftward shift of the LAS curve. 
C)  a rightward shift of the SAS curve. 
D)  a leftward shift of the SAS curve.

Question 3

Which of the following increases aggregate demand and shifts the AD curve rightward?

Accepted Answer

A)  a fall in the price level 
B)  an increase in the quantity of money and a resulting fall in the interest rate 
C)  predictions of a recession that lead to expectations of lower future income 
D)  an increase in the exchange rate that makes imports less expensive 
A)  a fall in the price level 
B)  an increase in the quantity of money and a resulting fall in the interest rate 
C)  predictions of a recession that lead to expectations of lower future income 
D)  an increase in the exchange rate that makes imports less expensive

Question 4

________ economists believe that the economy is self-regulating and will be at full employment as long as monetary policy is not erratic.

Accepted Answer

A)  Keynesian 
B)  Monetarist 
C)  Classical 
D)  All 
A)  Keynesian 
B)  Monetarist 
C)  Classical 
D)  All

Question 5

Moving upward along the SAS curve results in a ________ in the price level and ________ in real GDP.

Accepted Answer

A)  rise; an increase 
B)  rise; a decrease 
C)  fall; an increase 
D)  fall; a decrease 
A)  rise; an increase 
B)  rise; a decrease 
C)  fall; an increase 
D)  fall; a decrease

Question 6

The AD curve slopes

Accepted Answer

A)  downward due to the wealth and price effects. 
B)  downward due to the wealth and substitution effects. 
C)  upward due to the price and substitution effects. 
D)  upward due to the wealth and substitution effects. 
A)  downward due to the wealth and price effects. 
B)  downward due to the wealth and substitution effects. 
C)  upward due to the price and substitution effects. 
D)  upward due to the wealth and substitution effects.

Question 7

Give examples of factors that decrease short-run aggregate supply.Which way does the SAS curve shift?

Accepted Answer

Aggregate supply decreases if potential

Question 8

-In the above figure,the economy is at point A and the money wage rate rises by 10 percent.If the price level is constant,firms will be willing to supply output equal to

Accepted Answer

A)  less than $13.0 trillion 
B)  $13.0 trillion 
C)  more than $13.0 trillion 
D)  Without more information, it is impossible to determine which of the above answers is correct. 
A)  less than $13.0 trillion 
B)  $13.0 trillion 
C)  more than $13.0 trillion 
D)  Without more information, it is impossible to determine which of the above answers is correct.

Question 9

The short-run aggregate supply curve shows a positive relationship between the price level and real GDP.

Accepted Answer

A) True 
 B)False

Question 10

In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result,Ireland's

Accepted Answer

A)  short-run aggregate supply curve shifted leftward. 
B)  short-run aggregate supply curve shifted rightward. 
C)  long-run aggregate supply curve shifted rightward. 
D)  short-run and long-run aggregate supply curves shifted rightward. 
A)  short-run aggregate supply curve shifted leftward. 
B)  short-run aggregate supply curve shifted rightward. 
C)  long-run aggregate supply curve shifted rightward. 
D)  short-run and long-run aggregate supply curves shifted rightward.

Question 11

The short-run aggregate supply curve shifts because of changes in all of the following EXCEPT

Accepted Answer

A)  the capital stock. 
B)  technological progress. 
C)  money wage rates. 
D)  the price level. 
A)  the capital stock. 
B)  technological progress. 
C)  money wage rates. 
D)  the price level.

Question 12

In the short run,a supply shock that shifts the short-run aggregate supply curve leftward raises the price level and decreases real GDP.

Accepted Answer

A) True 
 B)False

Question 13

If the economy is in long run equilibrium and aggregate demand increases,then in the short run

Accepted Answer

A)  nothing happens because the economy is in long run equilibrium. 
B)  the price level rises and real GDP does not change. 
C)  real GDP increases and the price level does not change. 
D)  the price level rises and real GDP increases. 
A)  nothing happens because the economy is in long run equilibrium. 
B)  the price level rises and real GDP does not change. 
C)  real GDP increases and the price level does not change. 
D)  the price level rises and real GDP increases.

Question 14

The level of output when there is full employment is called actual GDP.

Accepted Answer

A) True 
 B)False

Question 15

The short-run aggregate supply curve is upward sloping because in the short run the

Accepted Answer

A)  money wage rate changes but the price level does not. 
B)  price level changes but the money wage rate does not. 
C)  both the money wage rate and the price level change. 
D)  neither the money wage rate nor the price level can change. 
A)  money wage rate changes but the price level does not. 
B)  price level changes but the money wage rate does not. 
C)  both the money wage rate and the price level change. 
D)  neither the money wage rate nor the price level can change.

Question 16

Suppose the economy was initially in a long-run equilibrium.Then the world economy expands so that foreign incomes rise.U.S.aggregate demand ________ and eventually the money wage rate ________.

Accepted Answer

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

Question 17

What is the difference between a recessionary gap and an inflationary gap?

Accepted Answer

A recessionary gap exists when the econo

Question 18

A monetarist economist believes that if the economy was left alone,it would rarely operate at full employment.

Accepted Answer

A) True 
 B)False

Question 19

A decrease in the price level accompanied by no change in the money wage rate leads to ________ movement along the ________ aggregate supply curve.

Accepted Answer

A)  a downward; short-run 
B)  an upward; short-run 
C)  a downward; long-run 
D)  an upward; long-run 
A)  a downward; short-run 
B)  an upward; short-run 
C)  a downward; long-run 
D)  an upward; long-run

Question 20

$$\begin{array} { | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Aggregate } \
\text { demand } \
\text { level } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Short-run } \
\text { aggregate } \
\text { supply } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Long-run } \
\text { aggregate } \
\text { supply } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} \
\hline 140 & 9.0 & 11.5 & 10.0 \
\hline 130 & 9.5 & 11.0 & 10.0 \
\hline 120 & 10.0 & 10.5 & 10.0 \
\hline 110 & 10.5 & 10.0 & 10.0 \
\hline 100 & 11.0 & 9.5 & 10.0 \
\hline
\end{array}$$
-The data in the above table indicate that the economy will be in a short-run macroeconomic equilibrium at a price level

Accepted Answer

A)  between 130 and 121. 
B)  between 119 and 111. 
C)  of 120. 
D)  of 110. 
A)  between 130 and 121. 
B)  between 119 and 111. 
C)  of 120. 
D)  of 110.

In the United States,of the following decades economic growth was most rapid during the ________.

Suppose there is a temporary increase in the price of oil.This is represented by

Which of the following increases aggregate demand and shifts the AD curve rightward?

________ economists believe that the economy is self-regulating and will be at full employment as long as monetary policy is not erratic.

Moving upward along the SAS curve results in a in the price level and in real GDP.

The AD curve slopes

Give examples of factors that decrease short-run aggregate supply.Which way does the SAS curve shift?

-In the above figure,the economy is at point A and the money wage rate rises by 10 percent.If the price level is constant,firms will be willing to supply output equal to

The short-run aggregate supply curve shows a positive relationship between the price level and real GDP.

In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result,Ireland's

The short-run aggregate supply curve shifts because of changes in all of the following EXCEPT

In the short run,a supply shock that shifts the short-run aggregate supply curve leftward raises the price level and decreases real GDP.

If the economy is in long run equilibrium and aggregate demand increases,then in the short run

The level of output when there is full employment is called actual GDP.

The short-run aggregate supply curve is upward sloping because in the short run the

Suppose the economy was initially in a long-run equilibrium.Then the world economy expands so that foreign incomes rise.U.S.aggregate demand and eventually the money wage rate .

What is the difference between a recessionary gap and an inflationary gap?

A monetarist economist believes that if the economy was left alone,it would rarely operate at full employment.

A decrease in the price level accompanied by no change in the money wage rate leads to movement along the 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

In the United States,of the following decades economic growth was most rapid during the ________.

Suppose there is a temporary increase in the price of oil.This is represented by

Which of the following increases aggregate demand and shifts the AD curve rightward?

________ economists believe that the economy is self-regulating and will be at full employment as long as monetary policy is not erratic.

Moving upward along the SAS curve results in a ________ in the price level and ________ in real GDP.

The AD curve slopes

Give examples of factors that decrease short-run aggregate supply.Which way does the SAS curve shift?

-In the above figure,the economy is at point A and the money wage rate rises by 10 percent.If the price level is constant,firms will be willing to supply output equal to

The short-run aggregate supply curve shows a positive relationship between the price level and real GDP.

In 2008 the money wage rate in Ireland increased by 4 percent while the price level increased by 8 percent. As a result,Ireland's

The short-run aggregate supply curve shifts because of changes in all of the following EXCEPT

In the short run,a supply shock that shifts the short-run aggregate supply curve leftward raises the price level and decreases real GDP.

If the economy is in long run equilibrium and aggregate demand increases,then in the short run

The level of output when there is full employment is called actual GDP.

The short-run aggregate supply curve is upward sloping because in the short run the

Suppose the economy was initially in a long-run equilibrium.Then the world economy expands so that foreign incomes rise.U.S.aggregate demand ________ and eventually the money wage rate ________.

What is the difference between a recessionary gap and an inflationary gap?

A monetarist economist believes that if the economy was left alone,it would rarely operate at full employment.

A decrease in the price level accompanied by no change in the money wage rate leads to ________ movement along the ________ 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

Moving upward along the SAS curve results in a in the price level and in real GDP.

Suppose the economy was initially in a long-run equilibrium.Then the world economy expands so that foreign incomes rise.U.S.aggregate demand and eventually the money wage rate .

A decrease in the price level accompanied by no change in the money wage rate leads to movement along the aggregate supply curve.