Question 1

What is a supply shock,and why might a supply shock lead to stagflation?

Accepted Answer

A supply shock is an unexpected event th

Question 2

The business cycle ________ on KB Homes since the company's inception over 60 years ago.

Accepted Answer

A)  has had virtually no effect 
B)  has always had a negative effect 
C)  has had a large effect 
D)  has always had a positive effect 
A)  has had virtually no effect 
B)  has always had a negative effect 
C)  has had a large effect 
D)  has always had a positive effect

Question 3

Figure 15-1
  
-Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

Accepted Answer

A)  AD₁ to AD₂. 
B)  AD₂ to AD₁. 
C)  point A to point B. 
D)  point B to point A. 
A)  AD₁ to AD₂. 
B)  AD₂ to AD₁. 
C)  point A to point B. 
D)  point B to point A.

Question 4

When the economy enters into a recession,your employer is ________ to reduce your wages because ________.

Accepted Answer

A)  unlikely; output and input prices generally fall during recession 
B)  unlikely; lower wages reduce productivity and morale 
C)  likely; output prices always fall during recession 
D)  likely; aggregate demand is vertical in the long run 
A)  unlikely; output and input prices generally fall during recession 
B)  unlikely; lower wages reduce productivity and morale 
C)  likely; output prices always fall during recession 
D)  likely; aggregate demand is vertical in the long run

Question 5

Briefly describe monetarism and the monetary growth rule.

Accepted Answer

Monetarism refers to the macroeconomic t

Question 6

Figure 15-2
  
-Refer to Figure 15-2.Ceteris paribus,a decrease in the capital stock 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 7

If the economy receives an influx of new workers from immigration,

Accepted Answer

A)  the long-run aggregate supply curve will shift to the right. 
B)  the long-run aggregate supply curve will shift to the left. 
C)  we will move up along the long-run aggregate supply curve. 
D)  we will move down along the long-run aggregate supply curve. 
A)  the long-run aggregate supply curve will shift to the right. 
B)  the long-run aggregate supply curve will shift to the left. 
C)  we will move up along the long-run aggregate supply curve. 
D)  we will move down along the long-run aggregate supply curve.

Question 8

Full-employment GDP is also known as

Accepted Answer

A)  realized GDP. 
B)  potential GDP. 
C)  politico-economic GDP. 
D)  balanced-budget GDP. 
A)  realized GDP. 
B)  potential GDP. 
C)  politico-economic GDP. 
D)  balanced-budget GDP.

Question 9

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing slower than potential real GDP?

Accepted Answer

Aggregate demand inc

Question 10

What is the relationship among the AD,SRAS and LRAS curves when the economy is in macroeconomic equilibrium?

Accepted Answer

When the economy is in long-ru

Question 11

Explain how the economy moves back to full employment from recession.Be sure to detail what happens to short-run aggregate supply,unemployment,equilibrium GDP and the price level.

Accepted Answer

When an economy enters a recession,sales

Question 12

Long-run macroeconomic equilibrium occurs when the aggregate demand curve ________ the short-run aggregate supply curve,and they ________ the long-run supply curve.

Accepted Answer

A)  intersects; intersect at a point to the right of 
B)  intersects; intersect at a point on 
C)  is steeper than; intersect at a point to the left of 
D)  is flatter than; intersect at a point to the right of 
A)  intersects; intersect at a point to the right of 
B)  intersects; intersect at a point on 
C)  is steeper than; intersect at a point to the left of 
D)  is flatter than; intersect at a point to the right of

Question 13

Figure 15-3
  
-Refer to Figure 15-3.Which of the points in the above graph are possible long-run equilibria?

Accepted Answer

A)  A and B 
B)  A and C 
C)  A and D 
D)  B and D 
A)  A and B 
B)  A and C 
C)  A and D 
D)  B and D

Question 14

The real business cycle model focuses on how

Accepted Answer

A)  wage and price stickiness explains fluctuations in real GDP. 
B)  the labor theory of value is the best measure of value of a good or service. 
C)  the Federal Reserve should adopt a monetary growth rule. 
D)  productivity shocks explain fluctuations in real GDP. 
A)  wage and price stickiness explains fluctuations in real GDP. 
B)  the labor theory of value is the best measure of value of a good or service. 
C)  the Federal Reserve should adopt a monetary growth rule. 
D)  productivity shocks explain fluctuations in real GDP.

Question 15

If workers and firms have rational expectations,they form their expectations using

Accepted Answer

A)  all the information available to them. 
B)  only information from the past. 
C)  only information provided to them by the government. 
D)  only information gathered from random sources. 
A)  all the information available to them. 
B)  only information from the past. 
C)  only information provided to them by the government. 
D)  only information gathered from random sources.

Question 16

According to the "wealth effect," when the ________ falls,the ________ rises.

Accepted Answer

A)  inflation rate; nominal value of household assets 
B)  unemployment rate; average level of household income 
C)  price level; the nominal value of household wealth 
D)  price level; the real value of household wealth 
A)  inflation rate; nominal value of household assets 
B)  unemployment rate; average level of household income 
C)  price level; the nominal value of household wealth 
D)  price level; the real value of household wealth

Question 17

Using the aggregate supply and demand model,illustrate what happens in the long run when the economy suffers a supply shock.Begin your analysis by assuming the economy has suffered the supply shock in the short run,but has not yet adjusted to it in the long run.

Accepted Answer

@#IMG-DLM& The economy is at point B with the pric

Question 18

Inflation is generally the result of total spending growing faster than total production.

Accepted Answer

A) True 
 B)False

Question 19

The ________ shows the relationship between the price level and quantity of real GDP demanded.

Accepted Answer

A)  consumer price index 
B)  aggregate expenditure line 
C)  45-degree line 
D)  aggregate demand curve 
A)  consumer price index 
B)  aggregate expenditure line 
C)  45-degree line 
D)  aggregate demand curve

Question 20

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

Accepted Answer

A)  Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B)  Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C)  Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D)  Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices. 
A)  Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B)  Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C)  Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D)  Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices.

What is a supply shock,and why might a supply shock lead to stagflation?

The business cycle ________ on KB Homes since the company's inception over 60 years ago.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

When the economy enters into a recession,your employer is to reduce your wages because .

Briefly describe monetarism and the monetary growth rule.

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,a decrease in the capital stock would be represented by a movement from

If the economy receives an influx of new workers from immigration,

Full-employment GDP is also known as

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing slower than potential real GDP?

What is the relationship among the AD,SRAS and LRAS curves when the economy is in macroeconomic equilibrium?

Explain how the economy moves back to full employment from recession.Be sure to detail what happens to short-run aggregate supply,unemployment,equilibrium GDP and the price level.

Long-run macroeconomic equilibrium occurs when the aggregate demand curve the short-run aggregate supply curve,and they the long-run supply curve.

Figure 15-3 -Refer to Figure 15-3.Which of the points in the above graph are possible long-run equilibria?

The real business cycle model focuses on how

If workers and firms have rational expectations,they form their expectations using

According to the "wealth effect," when the falls,the rises.

Using the aggregate supply and demand model,illustrate what happens in the long run when the economy suffers a supply shock.Begin your analysis by assuming the economy has suffered the supply shock in the short run,but has not yet adjusted to it in the long run.

Inflation is generally the result of total spending growing faster than total production.

The ________ shows the relationship between the price level and quantity of real GDP demanded.

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

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

What is a supply shock,and why might a supply shock lead to stagflation?

The business cycle ________ on KB Homes since the company's inception over 60 years ago.

Figure 15-1 -Refer to Figure 15-1.Ceteris paribus,an increase in personal income taxes would be represented by a movement from

When the economy enters into a recession,your employer is ________ to reduce your wages because ________.

Briefly describe monetarism and the monetary growth rule.

Figure 15-2 -Refer to Figure 15-2.Ceteris paribus,a decrease in the capital stock would be represented by a movement from

If the economy receives an influx of new workers from immigration,

Full-employment GDP is also known as

In the dynamic aggregate demand and aggregate supply model,what is the result of aggregate demand increasing slower than potential real GDP?

What is the relationship among the AD,SRAS and LRAS curves when the economy is in macroeconomic equilibrium?

Explain how the economy moves back to full employment from recession.Be sure to detail what happens to short-run aggregate supply,unemployment,equilibrium GDP and the price level.

Long-run macroeconomic equilibrium occurs when the aggregate demand curve ________ the short-run aggregate supply curve,and they ________ the long-run supply curve.

Figure 15-3 -Refer to Figure 15-3.Which of the points in the above graph are possible long-run equilibria?

The real business cycle model focuses on how

If workers and firms have rational expectations,they form their expectations using

According to the "wealth effect," when the ________ falls,the ________ rises.

Using the aggregate supply and demand model,illustrate what happens in the long run when the economy suffers a supply shock.Begin your analysis by assuming the economy has suffered the supply shock in the short run,but has not yet adjusted to it in the long run.

Inflation is generally the result of total spending growing faster than total production.

The ________ shows the relationship between the price level and quantity of real GDP demanded.

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

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

When the economy enters into a recession,your employer is to reduce your wages because .

Long-run macroeconomic equilibrium occurs when the aggregate demand curve the short-run aggregate supply curve,and they the long-run supply curve.

According to the "wealth effect," when the falls,the rises.