Question 1

Which of the following is most commonly used to monitor short-run changes in economic activity?

Accepted Answer

A)  the inflation rate 
B)  real GDP 
C)  aggregate demand 
D)  aggregate supply 
A)  the inflation rate 
B)  real GDP 
C)  aggregate demand 
D)  aggregate supply

Question 2

Other things the same,as the price level falls,

Accepted Answer

A)  the money supply falls. 
B)  interest rates rise. 
C)  a dollar buys more domestic goods. 
D)  the aggregate-demand curve shifts right. 
A)  the money supply falls. 
B)  interest rates rise. 
C)  a dollar buys more domestic goods. 
D)  the aggregate-demand curve shifts right.

Question 3

When the price level changes,which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

Accepted Answer

A)  the real value of wealth 
B)  the interest rate 
C)  the value of currency in the market for foreign exchange 
D)  All of the above are correct. 
A)  the real value of wealth 
B)  the interest rate 
C)  the value of currency in the market for foreign exchange 
D)  All of the above are correct.

Question 4

Other things the same,if the U.S.price level falls,then

Accepted Answer

A)  the supply of dollars in the market for foreign-currency exchange increases,so the exchange rate rises. 
B)  the supply of dollars in the market for foreign-currency exchange increases,so the exchange rate falls. 
C)  the supply of dollars in the market for foreign-currency exchange decreases,so the exchange rate rises. 
D)  the supply of dollars in the market for foreign-currency exchange decreases,so the exchange rate falls. 
A)  the supply of dollars in the market for foreign-currency exchange increases,so the exchange rate rises. 
B)  the supply of dollars in the market for foreign-currency exchange increases,so the exchange rate falls. 
C)  the supply of dollars in the market for foreign-currency exchange decreases,so the exchange rate rises. 
D)  the supply of dollars in the market for foreign-currency exchange decreases,so the exchange rate falls.

Question 5

The recessions of the 1970s are often attributed to

Accepted Answer

A)  declining inflation expectations. 
B)  an increase in oil prices. 
C)  declines in the price of stock. 
D)  decreases in the money supply. 
A)  declining inflation expectations. 
B)  an increase in oil prices. 
C)  declines in the price of stock. 
D)  decreases in the money supply.

Question 6

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 7

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 8

If international speculators lose confidence in foreign economies and want to move some of their wealth into the U.S.economy,then in the short run there is

Accepted Answer

A)  an increase in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a lower U.S.price level. 
B)  an increase in the value of the U.S.dollar in foreign exchange markets,a higher level of U.S.output and a higher U.S.price level. 
C)  a decrease in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a lower U.S.price level. 
D)  a decrease in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a higher U.S.price level. 
A)  an increase in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a lower U.S.price level. 
B)  an increase in the value of the U.S.dollar in foreign exchange markets,a higher level of U.S.output and a higher U.S.price level. 
C)  a decrease in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a lower U.S.price level. 
D)  a decrease in the value of the U.S.dollar in foreign exchange markets,a lower level of U.S.output and a higher U.S.price level.

Question 9

Which of the following shifts both the short-run and long-run aggregate supply right?

Accepted Answer

A)  an increase in the actual price level 
B)  an increase in the expected price level 
C)  an increase in the capital stock 
D)  None of the above is correct. 
A)  an increase in the actual price level 
B)  an increase in the expected price level 
C)  an increase in the capital stock 
D)  None of the above is correct.

Question 10

Other things the same,a decrease in the price level makes the interest rate decrease,which leads to a depreciation of the dollar in the foreign-currency exchange.

Accepted Answer

A) True 
 B)False

Question 11

When output rises,unemployment falls.

Accepted Answer

A) True 
 B)False

Question 12

If speculators bid up the value of the dollar in the market for foreign-currency exchange,U.S.aggregate demand would shift to the left.

Accepted Answer

A) True 
 B)False

Question 13

Suppose the economy is in long-run equilibrium.If there is a sharp increase in the minimum wage as well as an increase in pessimism about future business conditions,then in the short run,real GDP will

Accepted Answer

A)  rise and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be unaffected. 
B)  fall and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be unaffected. 
C)  rise and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be lower. 
D)  fall and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be lower. 
A)  rise and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be unaffected. 
B)  fall and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be unaffected. 
C)  rise and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be lower. 
D)  fall and the price level might rise,fall,or stay the same.In the long run,the price level might rise,fall,or stay the same but real GDP will be lower.

Question 14

The long-run aggregate supply curve shifts right if

Accepted Answer

A)  technology improves. 
B)  the price level decreases. 
C)  the money supply increases. 
D)  All of the above are correct. 
A)  technology improves. 
B)  the price level decreases. 
C)  the money supply increases. 
D)  All of the above are correct.

Question 15

During recessions

Accepted Answer

A)  workers are laid off. 
B)  factories are idle. 
C)  firms may find they are unable to sell all they produce. 
D)  All of the above are correct. 
A)  workers are laid off. 
B)  factories are idle. 
C)  firms may find they are unable to sell all they produce. 
D)  All of the above are correct.

Question 16

Aggregate demand includes

Accepted Answer

A)  the quantity of goods and services both the government and customers abroad want to buy. 
B)  the quantity of goods and services neither the government nor customers abroad want to buy. 
C)  the quantity of goods and service the government wants to buy,but not the quantity of goods and services customers abroad want to buy. 
D)  the quantity of goods and services customers abroad want to buy,but not the quantity of goods and services the government wants to buy. 
A)  the quantity of goods and services both the government and customers abroad want to buy. 
B)  the quantity of goods and services neither the government nor customers abroad want to buy. 
C)  the quantity of goods and service the government wants to buy,but not the quantity of goods and services customers abroad want to buy. 
D)  the quantity of goods and services customers abroad want to buy,but not the quantity of goods and services the government wants to buy.

Question 17

During recessions which type of spending falls?

Accepted Answer

A)  consumption and investment 
B)  investment but not consumption 
C)  consumption but not investment 
D)  neither consumption nor investment 
A)  consumption and investment 
B)  investment but not consumption 
C)  consumption but not investment 
D)  neither consumption nor investment

Question 18

Which of the following shifts aggregate demand to the right?

Accepted Answer

A)  an increase in the money supply 
B)  an increase in net exports due to something other than a change in domestic prices 
C)  an investment tax credit 
D)  All of the above are correct. 
A)  an increase in the money supply 
B)  an increase in net exports due to something other than a change in domestic prices 
C)  an investment tax credit 
D)  All of the above are correct.

Question 19

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 20

Suppose the economy is in long-run equilibrium.In a short span of time,there is a decline in the money supply,a tax increase,a pessimistic revision of expectations about future business conditions,and a rise in the value of the dollar.In the short run,we would expect

Accepted Answer

A)  the price level and real GDP both to rise. 
B)  the price level and real GDP both to fall. 
C)  the price level and real GDP both to stay the same. 
D)  All of the above are possible. 
A)  the price level and real GDP both to rise. 
B)  the price level and real GDP both to fall. 
C)  the price level and real GDP both to stay the same. 
D)  All of the above are possible.

Exam 33: Aggregate Demand and Aggregate Supply

Which of the following is most commonly used to monitor short-run changes in economic activity?

Other things the same,as the price level falls,

When the price level changes,which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

Other things the same,if the U.S.price level falls,then

The recessions of the 1970s are often attributed to

Economic expansions in Germany and Japan would cause

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

If international speculators lose confidence in foreign economies and want to move some of their wealth into the U.S.economy,then in the short run there is

Which of the following shifts both the short-run and long-run aggregate supply right?

Other things the same,a decrease in the price level makes the interest rate decrease,which leads to a depreciation of the dollar in the foreign-currency exchange.

When output rises,unemployment falls.

If speculators bid up the value of the dollar in the market for foreign-currency exchange,U.S.aggregate demand would shift to the left.

Suppose the economy is in long-run equilibrium.If there is a sharp increase in the minimum wage as well as an increase in pessimism about future business conditions,then in the short run,real GDP will

The long-run aggregate supply curve shifts right if

During recessions

Aggregate demand includes

During recessions which type of spending falls?

Which of the following shifts aggregate demand to the right?

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

Suppose the economy is in long-run equilibrium.In a short span of time,there is a decline in the money supply,a tax increase,a pessimistic revision of expectations about future business conditions,and a rise in the value of the dollar.In the short run,we would expect

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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 Macroeconomics: Basic Concepts

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

Five Debates Over Macroeconomic Policy

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