Question 1

The international trade effect states that

Accepted Answer

A)  an increase in the price level will raise net exports. 
B)  an increase in the price level will lower net exports. 
C)  an increase in the price level will raise exports. 
D)  an increase in the price level will lower imports. 
A)  an increase in the price level will raise net exports. 
B)  an increase in the price level will lower net exports. 
C)  an increase in the price level will raise exports. 
D)  an increase in the price level will lower imports.

Question 2

The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________.

Accepted Answer

A)  raises; recession; lowers; expansion 
B)  lowers; expansion; lowers; recession 
C)  raises; expansion; raises; recession 
D)  lowers; recession; raises; expansion 
A)  raises; recession; lowers; expansion 
B)  lowers; expansion; lowers; recession 
C)  raises; expansion; raises; recession 
D)  lowers; recession; raises; expansion

Question 3

On the long-run aggregate supply curve

Accepted Answer

A)  a decrease in the price level decreases the level of potential GDP. 
B)  a decrease in the price level increases the aggregate quantity of GDP supplied. 
C)  a decrease in the price level decreases the aggregate quantity of GDP supplied. 
D)  a decrease in the price level has no effect on the aggregate quantity of GDP supplied. 
A)  a decrease in the price level decreases the level of potential GDP. 
B)  a decrease in the price level increases the aggregate quantity of GDP supplied. 
C)  a decrease in the price level decreases the aggregate quantity of GDP supplied. 
D)  a decrease in the price level has no effect on the aggregate quantity of GDP supplied.

Question 4

The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time.

Accepted Answer

A) True 
 B)False

Question 5

Figure 15-2
  
-Refer to Figure 15-2.Ceteris paribus,an increase in productivity would be represented by a movement from

Accepted Answer

A)  SRAS₁ to SRAS₂. 
B)  SRAS₂ to SRAS₁. 
C)  point A to point B. 
D)  point B to point A. 
A)  SRAS₁ to SRAS₂. 
B)  SRAS₂ to SRAS₁. 
C)  point A to point B. 
D)  point B to point A.

Question 6

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

Accepted Answer

A)  SRAS shifted to the right by more than LRAS. 
B)  AD shifted to the right by more than SRAS. 
C)  AD shifted to the right by less than SRAS. 
D)  SRAS and AD do not shift. 
A)  SRAS shifted to the right by more than LRAS. 
B)  AD shifted to the right by more than SRAS. 
C)  AD shifted to the right by less than SRAS. 
D)  SRAS and AD do not shift.

The international trade effect states that

The automatic mechanism the price level in the case of and the price level in the case of .

On the long-run aggregate supply curve

The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time.

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in productivity would be represented by a movement from

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 15: Aggregate Demand and Aggregate Supply Analysis

The international trade effect states that

The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________.

On the long-run aggregate supply curve

The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time.

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,an increase in productivity would be represented by a movement from

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

The automatic mechanism the price level in the case of and the price level in the case of .