Question 1

The land of Ur increases its capital stock.As a result,the long-run aggregate supply curve shifts ________ and so does the ________ curve.

Accepted Answer

A)  rightward; aggregate demand 
B)  leftward; aggregate demand 
C)  rightward; short-run aggregate supply 
D)  leftward; short-run aggregate supply 
A)  rightward; aggregate demand 
B)  leftward; aggregate demand 
C)  rightward; short-run aggregate supply 
D)  leftward; short-run aggregate supply

Question 2

Over time in a growing economy,the long-run aggregate supply curve will

Accepted Answer

A)  become horizontal at the long-run potential price level. 
B)  shift rightward. 
C)  shift leftward. 
D)  become increasingly steep. 
A)  become horizontal at the long-run potential price level. 
B)  shift rightward. 
C)  shift leftward. 
D)  become increasingly steep.

Question 3

Which of the following decreases aggregate demand?

Accepted Answer

A)  The government increases taxes on both business and personal income. 
B)  Foreign incomes rise. 
C)  The quantity of money in the economy increases. 
D)  Households believe that the economy is headed for good times, with higher future incomes. 
A)  The government increases taxes on both business and personal income. 
B)  Foreign incomes rise. 
C)  The quantity of money in the economy increases. 
D)  Households believe that the economy is headed for good times, with higher future incomes.

Question 4

As the price level falls,the quantity of real wealth ________ and the aggregate quantity of real GDP demanded ________.

Accepted Answer

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

Question 5

$$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { level }
\end{array} & \begin{array} { c } 
\text { Aggregate } \
\text { demand } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Short-run } \
\text { aggregate } \
\text { supply } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} & \begin{array} { c } 
\text { Long-run } \
\text { aggregate } \
\text { supply } \
\text { (trillions of } \
\text { 2005 dollars) }
\end{array} \
\hline 140 & 4 & 8 & 7 \
\hline 130 & 5 & 7 & 7 \
\hline 120 & 6 & 6 & 7 \
\hline 110 & 7 & 5 & 7 \
\hline 100 & 8 & 4 & 7 \
\hline
\end{array}$$
-The data in the above table show that the economy will be in a short-run macroeconomic equilibrium at a price level of

Accepted Answer

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

Question 6

-Suppose the economy is at point B.If firms expect profits will be higher in the future,to what point might the economy's move in the short run?

Accepted Answer

A)  It stays at point B. 
B)  It shifts to a point such as A. 
C)  It shifts to a point such as C. 
D)  None of the above answers are correct because it is the SAS curve that shifts, not the AD curve. 
A)  It stays at point B. 
B)  It shifts to a point such as A. 
C)  It shifts to a point such as C. 
D)  None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

Question 7

-In the above figure,the shift from point C to point B might be the result of

Accepted Answer

A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  a decrease in government expenditures. 
D)  an increase in the quantity of money. 
A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  a decrease in government expenditures. 
D)  an increase in the quantity of money.

Question 8

In the long-run,the quantity of real GDP supplied increases when the price level increases.

Accepted Answer

A) True 
 B)False

Question 9

An increase in aggregate demand is shown by a

Accepted Answer

A)  rightward shift the AD curve. 
B)  movement upward along the AD curve. 
C)  movement downward along the AD curve. 
D)  leftward shift the AD curve. 
A)  rightward shift the AD curve. 
B)  movement upward along the AD curve. 
C)  movement downward along the AD curve. 
D)  leftward shift the AD curve.

Question 10

-In the figure above,the economy is at point A when the price level falls to 100.Money wage rates and all 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 11

When real GDP exceeds potential GDP,then the economy has

Accepted Answer

A)  an inflationary gap. 
B)  a below full-employment equilibrium. 
C)  a recessionary gap. 
D)  None of the above answers are correct. 
A)  an inflationary gap. 
B)  a below full-employment equilibrium. 
C)  a recessionary gap. 
D)  None of the above answers are correct.

Question 12

In a change to immigration policy during 2012,"people younger than 30 who came to the United States before the age of 16,pose no criminal or security threat,and were successful students or served in the military can get a two-year deferral from deportation,Homeland Security Secretary Janet Napolitano said," according to CNN,06/16/2012. If many of these immigrates had previously been afraid to work,now as a result of being able to work legally,

Accepted Answer

A)  both the short-run and long-run aggregate supply curves shift rightward. 
B)  only the long-run aggregate supply curve shifts rightward. 
C)  only the short-run aggregate supply curve shifts rightward. 
D)  neither the short-run nor the long-run supply curve shift. 
A)  both the short-run and long-run aggregate supply curves shift rightward. 
B)  only the long-run aggregate supply curve shifts rightward. 
C)  only the short-run aggregate supply curve shifts rightward. 
D)  neither the short-run nor the long-run supply curve shift.

Question 13

Suppose that the economy begins at a long-run equilibrium.Which of the following raises the price level and decrease real GDP in the short run?

Accepted Answer

A)  a decrease in the quantity of money 
B)  an increase in the price of oil that decreases aggregate supply 
C)  an increase in the stock of capital that increases aggregate supply 
D)  an increase in government expenditures 
A)  a decrease in the quantity of money 
B)  an increase in the price of oil that decreases aggregate supply 
C)  an increase in the stock of capital that increases aggregate supply 
D)  an increase in government expenditures

Question 14

One result of a decrease in aggregate demand and no change in aggregate supply is

Accepted Answer

A)  a recession. 
B)  an increase in employment levels. 
C)  an economic expansion. 
D)  a rise in the price level. 
A)  a recession. 
B)  an increase in employment levels. 
C)  an economic expansion. 
D)  a rise in the price level.

Question 15

The long-run aggregate supply curve is vertical because

Accepted Answer

A)  at full employment prices are stable. 
B)  there is no cyclical inflation. 
C)  potential GDP is independent of the price level. 
D)  the money wage rate increases faster than the price level. 
A)  at full employment prices are stable. 
B)  there is no cyclical inflation. 
C)  potential GDP is independent of the price level. 
D)  the money wage rate increases faster than the price level.

Question 16

An inflationary gap is occurs when

Accepted Answer

A)  real GDP is less than potential GDP. 
B)  real GDP exceeds potential GDP. 
C)  real GDP equals potential GDP. 
D)  the economy is at full employment. 
A)  real GDP is less than potential GDP. 
B)  real GDP exceeds potential GDP. 
C)  real GDP equals potential GDP. 
D)  the economy is at full employment.

Question 17

People expect their incomes will decrease next year.As a result,the ________ will shift ________.

Accepted Answer

A)  short-run aggregate supply curve; rightward 
B)  aggregate demand curve; rightward 
C)  aggregate demand curve; leftward 
D)  long-run aggregate supply curve; rightward 
A)  short-run aggregate supply curve; rightward 
B)  aggregate demand curve; rightward 
C)  aggregate demand curve; leftward 
D)  long-run aggregate supply curve; rightward

Question 18

The aggregate demand curve shows the ________ relationship between the price level and ________.

Accepted Answer

A)  positive; the quantity of real GDP demanded 
B)  negative; aggregate labor demanded 
C)  positive; aggregate labor demand 
D)  negative; the quantity of real GDP demanded 
A)  positive; the quantity of real GDP demanded 
B)  negative; aggregate labor demanded 
C)  positive; aggregate labor demand 
D)  negative; the quantity of real GDP demanded

Question 19

A below full-employment equilibrium

Accepted Answer

A)  is not possible in the U.S. economy. 
B)  occurs when real GDP is less than potential GDP. 
C)  occurs when the price level is rising very quickly. 
D)  occurs when real GDP exceeds potential GDP. 
A)  is not possible in the U.S. economy. 
B)  occurs when real GDP is less than potential GDP. 
C)  occurs when the price level is rising very quickly. 
D)  occurs when real GDP exceeds potential GDP.

Question 20

Which of the following shifts the aggregate demand curve rightward?

Accepted Answer

A)  an increase in the tax rate 
B)  a decrease in the price level 
C)  an increase in the quantity of money 
D)  an increase in the exchange rate 
A)  an increase in the tax rate 
B)  a decrease in the price level 
C)  an increase in the quantity of money 
D)  an increase in the exchange rate

The land of Ur increases its capital stock.As a result,the long-run aggregate supply curve shifts and so does the curve.

Over time in a growing economy,the long-run aggregate supply curve will

Which of the following decreases aggregate demand?

As the price level falls,the quantity of real wealth and the aggregate quantity of real GDP demanded .

-Suppose the economy is at point B.If firms expect profits will be higher in the future,to what point might the economy's move in the short run?

-In the above figure,the shift from point C to point B might be the result of

In the long-run,the quantity of real GDP supplied increases when the price level increases.

An increase in aggregate demand is shown by a

-In the figure above,the economy is at point A when the price level falls to 100.Money wage rates and all other resource prices remain constant.Firms are willing to supply output equal to

When real GDP exceeds potential GDP,then the economy has

Suppose that the economy begins at a long-run equilibrium.Which of the following raises the price level and decrease real GDP in the short run?

One result of a decrease in aggregate demand and no change in aggregate supply is

The long-run aggregate supply curve is vertical because

An inflationary gap is occurs when

People expect their incomes will decrease next year.As a result,the will shift .

The aggregate demand curve shows the relationship between the price level and .

A below full-employment equilibrium

Which of the following shifts the aggregate demand curve rightward?

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 land of Ur increases its capital stock.As a result,the long-run aggregate supply curve shifts ________ and so does the ________ curve.

Over time in a growing economy,the long-run aggregate supply curve will

Which of the following decreases aggregate demand?

As the price level falls,the quantity of real wealth ________ and the aggregate quantity of real GDP demanded ________.

-Suppose the economy is at point B.If firms expect profits will be higher in the future,to what point might the economy's move in the short run?

-In the above figure,the shift from point C to point B might be the result of

In the long-run,the quantity of real GDP supplied increases when the price level increases.

An increase in aggregate demand is shown by a

-In the figure above,the economy is at point A when the price level falls to 100.Money wage rates and all other resource prices remain constant.Firms are willing to supply output equal to

When real GDP exceeds potential GDP,then the economy has

Suppose that the economy begins at a long-run equilibrium.Which of the following raises the price level and decrease real GDP in the short run?

One result of a decrease in aggregate demand and no change in aggregate supply is

The long-run aggregate supply curve is vertical because

An inflationary gap is occurs when

People expect their incomes will decrease next year.As a result,the ________ will shift ________.

The aggregate demand curve shows the ________ relationship between the price level and ________.

A below full-employment equilibrium

Which of the following shifts the aggregate demand curve rightward?

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

The land of Ur increases its capital stock.As a result,the long-run aggregate supply curve shifts and so does the curve.

As the price level falls,the quantity of real wealth and the aggregate quantity of real GDP demanded .

People expect their incomes will decrease next year.As a result,the will shift .

The aggregate demand curve shows the relationship between the price level and .