Question 1

Sticky nominal wages can result in

Accepted Answer

A) lower profits for firms when the price level is lower than expected. 
B) a decrease in real wages when the price level is lower than expected. 
C) a short-run aggregate-supply curve that is vertical. 
D) a long-run aggregate-supply curve that is upward-sloping. 
A) lower profits for firms when the price level is lower than expected. 
B) a decrease in real wages when the price level is lower than expected. 
C) a short-run aggregate-supply curve that is vertical. 
D) a long-run aggregate-supply curve that is upward-sloping.

Question 2

Recession come at

Accepted Answer

A) regular intervals. During recessions consumption spending falls relatively more than investment spending. 
B) regular intervals. During recessions investment spending falls relatively more than consumption spending. 
C) irregular intervals. During recessions consumption spending falls relatively more than investment spending. 
D) irregular intervals. During recessions investment spending falls relatively more than consumption spending. 
A) regular intervals. During recessions consumption spending falls relatively more than investment spending. 
B) regular intervals. During recessions investment spending falls relatively more than consumption spending. 
C) irregular intervals. During recessions consumption spending falls relatively more than investment spending. 
D) irregular intervals. During recessions investment spending falls relatively more than consumption spending.

Question 3

Which of the following both shift aggregate demand right?

Accepted Answer

A) net exports rise for some reason other than a price change and the money supply rises. 
B) net exports rise for some reason other than a price change and the price level rises. 
C) net exports fall for some reason other than a price change and the money supply rises. 
D) net exports fall for some reason other than a price change and the price level rises. 
A) net exports rise for some reason other than a price change and the money supply rises. 
B) net exports rise for some reason other than a price change and the price level rises. 
C) net exports fall for some reason other than a price change and the money supply rises. 
D) net exports fall for some reason other than a price change and the price level rises.

Question 4

Make a list of things that would shift the long-run aggregate supply curve to the right.

Accepted Answer

Examples in the text (or variations) inc

Question 5

In which case can we be sure real GDP rises in the short run?

Accepted Answer

A) foreign economies expand and taxes rise 
B) foreign economies expand and taxes fall 
C) foreign economies contract and taxes fall 
D) None of the above are correct. 
A) foreign economies expand and taxes rise 
B) foreign economies expand and taxes fall 
C) foreign economies contract and taxes fall 
D) None of the above are correct.

Question 6

In order to understand how the economy works in the short run, we need to

Accepted Answer

A) study the classical model. 
B) study a model in which real and nominal variables interact. 
C) understand that "money is a veil." 
D) understand that money is neutral in the short run. 
A) study the classical model. 
B) study a model in which real and nominal variables interact. 
C) understand that "money is a veil." 
D) understand that money is neutral in the short run.

Question 7

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

Accepted Answer

A) True 
 B)False

Question 8

The classical dichotomy and monetary neutrality are represented graphically by

Accepted Answer

A) an upward-sloping long-run aggregate-supply curve. 
B) a vertical long-run aggregate-supply curve. 
C) an upward-sloping short-run aggregate-curve. 
D) a downward-sloping aggregate-demand curve. 
A) an upward-sloping long-run aggregate-supply curve. 
B) a vertical long-run aggregate-supply curve. 
C) an upward-sloping short-run aggregate-curve. 
D) a downward-sloping aggregate-demand curve.

Question 9

Consider the exhibit below for the following questions.Figure 20-1  
-Refer to Figure 20-1. The economy would be moving to long-run equilibrium if it started at

Accepted Answer

A) A and moved to B. 
B) C and moved to B. 
C) D and moved to C. 
D) None of the above is correct. 
A) A and moved to B. 
B) C and moved to B. 
C) D and moved to C. 
D) None of the above is correct.

Question 10

The recessions associated with the business cycle come at regular intervals.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following did not happen during the onset of the Great Depression?

Accepted Answer

A) The money supply fell as households took money out of bank deposits. 
B) The Fed conducted expansionary monetary policy. 
C) Stock prices fell about 90 percent. 
D) Disruption of the banking system made it difficult for some firms to obtain funds for investment. 
A) The money supply fell as households took money out of bank deposits. 
B) The Fed conducted expansionary monetary policy. 
C) Stock prices fell about 90 percent. 
D) Disruption of the banking system made it difficult for some firms to obtain funds for investment.

Question 12

Recessions in China and India would cause

Accepted Answer

A) the U.S. price level and real GDP to rise. 
B) the U.S. price level and real GDP to fall. 
C) the U.S. price level to rise and real GDP to fall. 
D) the U.S. price level to fall and real GDP to rise. 
A) the U.S. price level and real GDP to rise. 
B) the U.S. price level and real GDP to fall. 
C) the U.S. price level to rise and real GDP to fall. 
D) the U.S. price level to fall and real GDP to rise.

Question 13

Economists mostly agree that the Great Depression was principally caused by factors that shifted short-run aggregate supply left.

Accepted Answer

A) True 
 B)False

Question 14

Most macroeconomic variables that measure some type of income, spending, or production fluctuate closely together.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Accepted Answer

A) The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. 
B) The price level and quantity of output adjust to bring aggregate demand and supply into balance. 
C) The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price. 
D) All of the above are correct. 
A) The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. 
B) The price level and quantity of output adjust to bring aggregate demand and supply into balance. 
C) The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price. 
D) All of the above are correct.

Question 16

Other things the same, an increase in the expected price level shifts

Accepted Answer

A) short-run aggregate supply right. 
B) short-run aggregate supply left. 
C) aggregate-demand right. 
D) aggregated-demand left. 
A) short-run aggregate supply right. 
B) short-run aggregate supply left. 
C) aggregate-demand right. 
D) aggregated-demand left.

Question 17

Economic expansions in Germany and Japan would cause

Accepted Answer

A) the U.S. price level and real GDP to rise. 
B) the U.S. price level and real GDP to fall. 
C) the U.S. price level to rise and real GDP to fall. 
D) the U.S. price level to fall and real GDP to rise. 
A) the U.S. price level and real GDP to rise. 
B) the U.S. price level and real GDP to fall. 
C) the U.S. price level to rise and real GDP to fall. 
D) the U.S. price level to fall and real GDP to rise.

Question 18

The long-run aggregate supply curve would shift right if the government were to

Accepted Answer

A) increase the minimum-wage. 
B) make unemployment benefits more generous. 
C) raise taxes on investment spending. 
D) None of the above is correct. 
A) increase the minimum-wage. 
B) make unemployment benefits more generous. 
C) raise taxes on investment spending. 
D) None of the above is correct.

Question 19

Which of the following explains why production rises in most years?

Accepted Answer

A) increases in the labor force 
B) increases in the capital stock 
C) advances in technological knowledge 
D) All of the above are correct. 
A) increases in the labor force 
B) increases in the capital stock 
C) advances in technological knowledge 
D) All of the above are correct.

Question 20

Which of the following correctly describes actions of the U.S. government during the recession of 2008-2009?

Accepted Answer

A) It refused to provide banks funding and made no significant changes in government spending. 
B) It refused to provide banks funding but made a large increase in government spending. 
C) It became part owner of some banks but made no significant change in government spending 
D) It became part owner of some banks and made a large increase in government spending. 
A) It refused to provide banks funding and made no significant changes in government spending. 
B) It refused to provide banks funding but made a large increase in government spending. 
C) It became part owner of some banks but made no significant change in government spending 
D) It became part owner of some banks and made a large increase in government spending.

Exam 20: Aggregate Demand and Aggregate Supply

Sticky nominal wages can result in

Recession come at

Which of the following both shift aggregate demand right?

Make a list of things that would shift the long-run aggregate supply curve to the right.

In which case can we be sure real GDP rises in the short run?

In order to understand how the economy works in the short run, we need to

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

The classical dichotomy and monetary neutrality are represented graphically by

Consider the exhibit below for the following questions.Figure 20-1 -Refer to Figure 20-1. The economy would be moving to long-run equilibrium if it started at

The recessions associated with the business cycle come at regular intervals.

Which of the following did not happen during the onset of the Great Depression?

Recessions in China and India would cause

Economists mostly agree that the Great Depression was principally caused by factors that shifted short-run aggregate supply left.

Most macroeconomic variables that measure some type of income, spending, or production fluctuate closely together.

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Other things the same, an increase in the expected price level shifts

Economic expansions in Germany and Japan would cause

The long-run aggregate supply curve would shift right if the government were to

Which of the following explains why production rises in most years?

Which of the following correctly describes actions of the U.S. government during the recession of 2008-2009?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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