Question 1

The relationship between the level of prices and total quantity of goods and services producers are willing to supply is represented by the

Accepted Answer

A)  aggregate demand curve. 
B)  aggregate supply curve. 
C)  sticky price curve. 
D)  GDP multiplier. 
A)  aggregate demand curve. 
B)  aggregate supply curve. 
C)  sticky price curve. 
D)  GDP multiplier.

Question 2

The multiplier represents the ratio of the total shift in aggregate demand to the

Accepted Answer

A)  total shift in short-run aggregate supply. 
B)  initial shift in short-run aggregate supply. 
C)  initial shift in aggregate demand. 
D)  total shift in long-run aggregate supply. 
A)  total shift in short-run aggregate supply. 
B)  initial shift in short-run aggregate supply. 
C)  initial shift in aggregate demand. 
D)  total shift in long-run aggregate supply.

Question 3

Recall the Application about the factors involved in causing recessions, and the causes of recessions in the United States from 1893 to 1990 to answer the following question(s).
-Recall the Application. Recessions can occur either when there is a(n) ________ in aggregate demand or a(n) ________ in aggregate supply.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase

Question 4

Prices for industrial commodities such as steel rods or machine tools are

Accepted Answer

A)  heavy prices. 
B)  sticky prices. 
C)  auction prices. 
D)  custom prices. 
A)  heavy prices. 
B)  sticky prices. 
C)  auction prices. 
D)  custom prices.

Question 5

Which one of the following would shift the aggregate demand curve to the left?

Accepted Answer

A)  an increase in the money supply 
B)  an increase in government spending 
C)  an increase in exports 
D)  an increase in taxes 
A)  an increase in the money supply 
B)  an increase in government spending 
C)  an increase in exports 
D)  an increase in taxes

Question 6

The increase in spending that occurs because the real value of money increases when the price level falls is known as the

Accepted Answer

A)  interest rate effect. 
B)  international trade effect. 
C)  price effect. 
D)  wealth effect. 
A)  interest rate effect. 
B)  international trade effect. 
C)  price effect. 
D)  wealth effect.

Question 7

Assuming a long-run aggregate supply curve, a decrease in taxes results in ________ in output and ________ in price level.

Accepted Answer

A)  a decrease; a decrease 
B)  no change; an increase 
C)  no change; a decrease 
D)  an increase; no change 
A)  a decrease; a decrease 
B)  no change; an increase 
C)  no change; a decrease 
D)  an increase; no change

Question 8

During an economic boom

Accepted Answer

A)  the level of unemployment tends to be high. 
B)  it is difficult for firms to recruit and retain workers. 
C)  firms have an easier time purchasing raw materials. 
D)  prices tend to decrease over time. 
A)  the level of unemployment tends to be high. 
B)  it is difficult for firms to recruit and retain workers. 
C)  firms have an easier time purchasing raw materials. 
D)  prices tend to decrease over time.

Question 9

If the government decreased its purchases of goods and services by $4,000, and this resulted in an eventual decrease in GDP and income of $10,000, the MPC would be equal to

Accepted Answer

A)  2.5. 
B)  1.5. 
C)  0.6. 
D)  0.4. 
A)  2.5. 
B)  1.5. 
C)  0.6. 
D)  0.4.

Question 10

In the long run, the level of output depends on the price level.

Accepted Answer

A) True 
 B)False

Question 11

Recall the Application about the factors involved in causing recessions, and the causes of recessions in the United States from 1893 to 1990 to answer the following question(s).
-According to this Application, the recession in 1981 was caused by

Accepted Answer

A)  increasing oil prices which resulted in a decrease in aggregate supply. 
B)  the government cutting back on aggregate demand to reduce inflation. 
C)  an decrease in aggregate supply resulting from U.S. bank collapses. 
D)  massive immigration from Europe to the United States. 
A)  increasing oil prices which resulted in a decrease in aggregate supply. 
B)  the government cutting back on aggregate demand to reduce inflation. 
C)  an decrease in aggregate supply resulting from U.S. bank collapses. 
D)  massive immigration from Europe to the United States.

Question 12

An increase in the money supply will increase aggregate demand.

Accepted Answer

A) True 
 B)False

Question 13

When consumers realize additional income in a household and spend the additional monies, the portion of the additional income that is spent is measured by the

Accepted Answer

A)  credit increase theory. 
B)  marginal propensity to consume. 
C)  aggregate demand factor. 
D)  measure of individual wealth. 
A)  credit increase theory. 
B)  marginal propensity to consume. 
C)  aggregate demand factor. 
D)  measure of individual wealth.

Question 14

Figure 14.2
-Refer to Figure 14.2. A movement from point d to point b could be caused by a(n)

Accepted Answer

A)  increase in government spending. 
B)  increase in the price of oil. 
C)  increase in taxes. 
D)  decrease in short-run aggregate supply. 
A)  increase in government spending. 
B)  increase in the price of oil. 
C)  increase in taxes. 
D)  decrease in short-run aggregate supply.

Question 15

Which of the following factors influence the position of the long-run aggregate supply curve?

Accepted Answer

A)  the supply of money 
B)  government spending 
C)  taxes 
D)  the level of full-employment output 
A)  the supply of money 
B)  government spending 
C)  taxes 
D)  the level of full-employment output

Question 16

What are the two types of prices in an economy?

Accepted Answer

The answer of What are the two types of prices...

Question 17

Workers often have ________ contracts and so their wages are ________.

Accepted Answer

A)  long-term; flexible 
B)  long-term; sticky 
C)  short-term; sticky 
D)  short-term; flexible 
A)  long-term; flexible 
B)  long-term; sticky 
C)  short-term; sticky 
D)  short-term; flexible

Question 18

Recall the Application about falling oil prices and their effect on the U.S. economy to answer the following question(s).
-According to this Application, why did the recent decrease in oil prices have only a modest effect on economic growth?

Accepted Answer

A)  Consumers may have saved the money that resulted from lower gasoline prices. 
B)  There was less incentive to produce energy and invest in new capital and equipment. 
C)  Government spending decreased significantly. 
D)  Both A and B are correct. 
A)  Consumers may have saved the money that resulted from lower gasoline prices. 
B)  There was less incentive to produce energy and invest in new capital and equipment. 
C)  Government spending decreased significantly. 
D)  Both A and B are correct.

Question 19

If prices are sticky

Accepted Answer

A)  economic activity will be coordinated efficiently. 
B)  economic activity will not be coordinated efficiently. 
C)  prices will quickly adjust to changes in demand. 
D)  quantity supplied will always equal quantity demand. 
A)  economic activity will be coordinated efficiently. 
B)  economic activity will not be coordinated efficiently. 
C)  prices will quickly adjust to changes in demand. 
D)  quantity supplied will always equal quantity demand.

Question 20

The mechanism that normally coordinates what goes on in an economy is the

Accepted Answer

A)  government. 
B)  price system. 
C)  stock market. 
D)  Federal Reserve. 
A)  government. 
B)  price system. 
C)  stock market. 
D)  Federal Reserve.

The relationship between the level of prices and total quantity of goods and services producers are willing to supply is represented by the

The multiplier represents the ratio of the total shift in aggregate demand to the

Recall the Application about the factors involved in causing recessions, and the causes of recessions in the United States from 1893 to 1990 to answer the following question(s). -Recall the Application. Recessions can occur either when there is a(n) in aggregate demand or a(n) in aggregate supply.

Prices for industrial commodities such as steel rods or machine tools are

Which one of the following would shift the aggregate demand curve to the left?

The increase in spending that occurs because the real value of money increases when the price level falls is known as the

Assuming a long-run aggregate supply curve, a decrease in taxes results in in output and in price level.

During an economic boom

If the government decreased its purchases of goods and services by $4,000, and this resulted in an eventual decrease in GDP and income of $10,000, the MPC would be equal to

In the long run, the level of output depends on the price level.

Recall the Application about the factors involved in causing recessions, and the causes of recessions in the United States from 1893 to 1990 to answer the following question(s). -According to this Application, the recession in 1981 was caused by

An increase in the money supply will increase aggregate demand.

When consumers realize additional income in a household and spend the additional monies, the portion of the additional income that is spent is measured by the

Figure 14.2 -Refer to Figure 14.2. A movement from point d to point b could be caused by a(n)

Which of the following factors influence the position of the long-run aggregate supply curve?

What are the two types of prices in an economy?

Workers often have contracts and so their wages are .

Recall the Application about falling oil prices and their effect on the U.S. economy to answer the following question(s). -According to this Application, why did the recent decrease in oil prices have only a modest effect on economic growth?

If prices are sticky

The mechanism that normally coordinates what goes on in an economy is the

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters

Exam 14: Aggregate Demand and Aggregate Supply

The relationship between the level of prices and total quantity of goods and services producers are willing to supply is represented by the

The multiplier represents the ratio of the total shift in aggregate demand to the

Prices for industrial commodities such as steel rods or machine tools are

Which one of the following would shift the aggregate demand curve to the left?

The increase in spending that occurs because the real value of money increases when the price level falls is known as the

Assuming a long-run aggregate supply curve, a decrease in taxes results in ________ in output and ________ in price level.

During an economic boom

If the government decreased its purchases of goods and services by $4,000, and this resulted in an eventual decrease in GDP and income of $10,000, the MPC would be equal to

In the long run, the level of output depends on the price level.

Recall the Application about the factors involved in causing recessions, and the causes of recessions in the United States from 1893 to 1990 to answer the following question(s). -According to this Application, the recession in 1981 was caused by

An increase in the money supply will increase aggregate demand.

When consumers realize additional income in a household and spend the additional monies, the portion of the additional income that is spent is measured by the

Figure 14.2 -Refer to Figure 14.2. A movement from point d to point b could be caused by a(n)

Which of the following factors influence the position of the long-run aggregate supply curve?

What are the two types of prices in an economy?

Workers often have ________ contracts and so their wages are ________.

Recall the Application about falling oil prices and their effect on the U.S. economy to answer the following question(s). -According to this Application, why did the recent decrease in oil prices have only a modest effect on economic growth?

If prices are sticky

The mechanism that normally coordinates what goes on in an economy is the

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters

Assuming a long-run aggregate supply curve, a decrease in taxes results in in output and in price level.

Workers often have contracts and so their wages are .