Question 1

The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be:

Accepted Answer

A)  horizontal at the full-employment level of real GDP. 
B)  positively sloped at the full-employment level of real GDP. 
C)  vertical at the full-employment level of real GDP. 
D)  backward bending at the full-employment level of real GDP. 
A)  horizontal at the full-employment level of real GDP. 
B)  positively sloped at the full-employment level of real GDP. 
C)  vertical at the full-employment level of real GDP. 
D)  backward bending at the full-employment level of real GDP.

Question 2

Exhibit 14-3 Aggregate supply and demand curves
  
-The shift from AS₁ to AS₂ in Exhibit 14-3 could be caused by a(n):

Accepted Answer

A)  sudden increase in the price of oil. 
B)  increase in input prices for most firms. 
C)  increase in workers' wages. 
D)  all of the above. 
A)  sudden increase in the price of oil. 
B)  increase in input prices for most firms. 
C)  increase in workers' wages. 
D)  all of the above.

Question 3

Exhibit 14-1 Aggregate supply curve
  
-In Exhibit 14-1,resources are fully employed,and competition among producers for resources will lead to a higher price level in:

Accepted Answer

A)  the segment labeled ab. 
B)  the segment labeled bc. 
C)  the segment labeled cd. 
D)  both segment bc and segment cd. 
E)  the entire curve. 
A)  the segment labeled ab. 
B)  the segment labeled bc. 
C)  the segment labeled cd. 
D)  both segment bc and segment cd. 
E)  the entire curve.

Question 4

In the intermediate range of the aggregate supply curve,if government spending increases caused the aggregate demand curve to shift outwards,which of the following is most likely to occur?

Accepted Answer

A)  The price level and real GDP will both rise. 
B)  The price level will not change, but real GDP will increase. 
C)  The price level will rise, but real GDP will not change. 
D)  Both the price level and real GDP will not change. 
A)  The price level and real GDP will both rise. 
B)  The price level will not change, but real GDP will increase. 
C)  The price level will rise, but real GDP will not change. 
D)  Both the price level and real GDP will not change.

Question 5

Exhibit 14-8 Aggregate demand and supply
  
-In Exhibit 14-8,if aggregate demand shifts from AD₁ to AD₂,

Accepted Answer

A)  real GDP will increase from $3.0 to $7.0, and the price level will remain the same. 
B)  real GDP will increase from $3.0 to $4.0, and the price level will remain the same. 
C)  real GDP and the price level will both remain the same. 
D)  real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140. 
A)  real GDP will increase from $3.0 to $7.0, and the price level will remain the same. 
B)  real GDP will increase from $3.0 to $4.0, and the price level will remain the same. 
C)  real GDP and the price level will both remain the same. 
D)  real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140.

Question 6

Which of the following is not a reason for the downward slope of an aggregate demand curve?

Accepted Answer

A)  Real balances effect. 
B)  Real interest-rate effect. 
C)  Net exports effect. 
D)  All of the above are reasons. 
A)  Real balances effect. 
B)  Real interest-rate effect. 
C)  Net exports effect. 
D)  All of the above are reasons.

Question 7

In the upward-sloping segment of the aggregate supply curve,

Accepted Answer

A)  when GDP increases, the price level rises. 
B)  when GDP increases, the price level does not change. 
C)  when GDP decreases, the price level rises. 
D)  when GDP increases, the price level falls. 
E)  there is no relationship between changes in GDP and changes in the price level. 
A)  when GDP increases, the price level rises. 
B)  when GDP increases, the price level does not change. 
C)  when GDP decreases, the price level rises. 
D)  when GDP increases, the price level falls. 
E)  there is no relationship between changes in GDP and changes in the price level.

Question 8

Exhibit 14-2 Aggregate supply and demand curves
  
-In Exhibit 14-2,the change in equilibrium from E₁ to E₂ represents:

Accepted Answer

A)  cost-push inflation. 
B)  demand-pull inflation. 
C)  price-push inflation. 
D)  wage-push inflation. 
A)  cost-push inflation. 
B)  demand-pull inflation. 
C)  price-push inflation. 
D)  wage-push inflation.

The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be:

Exhibit 14-3 Aggregate supply and demand curves -The shift from AS₁ to AS₂ in Exhibit 14-3 could be caused by a(n):

Exhibit 14-1 Aggregate supply curve -In Exhibit 14-1,resources are fully employed,and competition among producers for resources will lead to a higher price level in:

In the intermediate range of the aggregate supply curve,if government spending increases caused the aggregate demand curve to shift outwards,which of the following is most likely to occur?

Exhibit 14-8 Aggregate demand and supply -In Exhibit 14-8,if aggregate demand shifts from AD₁ to AD₂,

Which of the following is not a reason for the downward slope of an aggregate demand curve?

In the upward-sloping segment of the aggregate supply curve,

Exhibit 14-2 Aggregate supply and demand curves -In Exhibit 14-2,the change in equilibrium from E₁ to E₂ represents:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 14: Aggregate Demand and Supply

The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be:

Exhibit 14-3 Aggregate supply and demand curves -The shift from AS₁ to AS₂ in Exhibit 14-3 could be caused by a(n):

Exhibit 14-1 Aggregate supply curve -In Exhibit 14-1,resources are fully employed,and competition among producers for resources will lead to a higher price level in:

In the intermediate range of the aggregate supply curve,if government spending increases caused the aggregate demand curve to shift outwards,which of the following is most likely to occur?

Exhibit 14-8 Aggregate demand and supply -In Exhibit 14-8,if aggregate demand shifts from AD₁ to AD₂,

Which of the following is not a reason for the downward slope of an aggregate demand curve?

In the upward-sloping segment of the aggregate supply curve,

Exhibit 14-2 Aggregate supply and demand curves -In Exhibit 14-2,the change in equilibrium from E₁ to E₂ represents:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters