Question 1

A decrease in the price level will

Accepted Answer

A) shift the aggregate demand curve to the left. 
B) shift the aggregate demand curve to the right. 
C) move the economy up along a stationary aggregate demand curve. 
D) move the economy down along a stationary aggregate demand curve. 
A) shift the aggregate demand curve to the left. 
B) shift the aggregate demand curve to the right. 
C) move the economy up along a stationary aggregate demand curve. 
D) move the economy down along a stationary aggregate demand curve. D

Question 2

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,an increase in interest rates 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. B

Question 3

All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except

Accepted Answer

A) unions are successful in pushing up wages. 
B) firms are often slow to adjust wages. 
C) contracts make prices and wages sticky. 
D) menu costs make some prices sticky. 
A) unions are successful in pushing up wages. 
B) firms are often slow to adjust wages. 
C) contracts make prices and wages sticky. 
D) menu costs make some prices sticky. A

Question 4

Which aggregate supply curve has a positive slope?

Accepted Answer

A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run 
A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run

Question 5

Figure 13-2  
-Refer to Figure 13-2.Ceteris paribus,an increase 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 6

Because of the slope of the aggregate demand curve,we can say that

Accepted Answer

A) a decrease in the price level leads to a lower level of real GDP demanded. 
B) an increase in the price level leads to no change in the level of real GDP demanded. 
C) a decrease in the price level leads to a higher level of real GDP demanded. 
D) an increase in the price level leads to a higher level of real GDP demanded. 
A) a decrease in the price level leads to a lower level of real GDP demanded. 
B) an increase in the price level leads to no change in the level of real GDP demanded. 
C) a decrease in the price level leads to a higher level of real GDP demanded. 
D) an increase in the price level leads to a higher level of real GDP demanded.

Question 7

A decrease in disposable income will shift the aggregate demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 8

Proponents of the ________ model argue that the short-run supply curve is vertical.

Accepted Answer

A) the monetarist model 
B) the new classical model 
C) the real business cycle model 
D) the new Keynesian model 
A) the monetarist model 
B) the new classical model 
C) the real business cycle model 
D) the new Keynesian model

Question 9

New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy.

Accepted Answer

A) True 
 B)False

Question 10

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,an increase in government spending 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 11

A decrease in government spending will result in a decrease in the price level and a decrease in real GDP in the long run.

Accepted Answer

A) True 
 B)False

Question 12

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S.aggregate demand.

Accepted Answer

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

Question 13

If aggregate demand just decreased,which of the following may have caused the decrease?

Accepted Answer

A) a decrease in exports 
B) a decrease in the interest rate 
C) a decrease in the price level 
D) a decrease in imports 
A) a decrease in exports 
B) a decrease in the interest rate 
C) a decrease in the price level 
D) a decrease in imports

Question 14

________ of unemployment during ________ make it easier for workers to ________ wages.

Accepted Answer

A) High levels; a recession; negotiate higher 
B) Low levels; an expansion; negotiate higher 
C) Low levels; a recession; accept lower 
D) High levels; an expansion; accept lower 
A) High levels; a recession; negotiate higher 
B) Low levels; an expansion; negotiate higher 
C) Low levels; a recession; accept lower 
D) High levels; an expansion; accept lower

Question 15

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income 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 16

Potential GDP is also referred to as

Accepted Answer

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

Question 17

Figure 13-2  
-Refer to Figure 13-2.Ceteris paribus,a decrease in the expected future price level 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 18

An increase in investment causes the price level to ________ in the short run and ________ in the long run.

Accepted Answer

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

Question 19

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

Accepted Answer

A) the financial crisis that began in 2007 
B) the rapid inflation of the early 2000s 
C) increases in the price of lumber 
D) rising wages in the construction industry 
A) the financial crisis that began in 2007 
B) the rapid inflation of the early 2000s 
C) increases in the price of lumber 
D) rising wages in the construction industry

Question 20

An increase in the price level will

Accepted Answer

A) shift the short-run aggregate supply curve to the left. 
B) shift the short-run aggregate supply curve to the right. 
C) move the economy up along a stationary short-run aggregate supply curve. 
D) move the economy down along a stationary short-run aggregate supply curve. 
A) shift the short-run aggregate supply curve to the left. 
B) shift the short-run aggregate supply curve to the right. 
C) move the economy up along a stationary short-run aggregate supply curve. 
D) move the economy down along a stationary short-run aggregate supply curve.

A decrease in the price level will

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in interest rates would be represented by a movement from

All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except

Which aggregate supply curve has a positive slope?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the capital stock would be represented by a movement from

Because of the slope of the aggregate demand curve,we can say that

A decrease in disposable income will shift the aggregate demand curve to the left.

Proponents of the ________ model argue that the short-run supply curve is vertical.

New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in government spending would be represented by a movement from

A decrease in government spending will result in a decrease in the price level and a decrease in real GDP in the long run.

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will exports from the United States to Mexico and U.S.aggregate demand.

If aggregate demand just decreased,which of the following may have caused the decrease?

of unemployment during make it easier for workers to wages.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Potential GDP is also referred to as

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in the expected future price level would be represented by a movement from

An increase in investment causes the price level to in the short run and in the long run.

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

An increase in the price level will

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 13: Aggregate Demand and Aggregate Supply Analysis

A decrease in the price level will

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in interest rates would be represented by a movement from

All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except

Which aggregate supply curve has a positive slope?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the capital stock would be represented by a movement from

Because of the slope of the aggregate demand curve,we can say that

A decrease in disposable income will shift the aggregate demand curve to the left.

Proponents of the ________ model argue that the short-run supply curve is vertical.

New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in government spending would be represented by a movement from

A decrease in government spending will result in a decrease in the price level and a decrease in real GDP in the long run.

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S.aggregate demand.

If aggregate demand just decreased,which of the following may have caused the decrease?

________ of unemployment during ________ make it easier for workers to ________ wages.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Potential GDP is also referred to as

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in the expected future price level would be represented by a movement from

An increase in investment causes the price level to ________ in the short run and ________ in the long run.

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

An increase in the price level will

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will exports from the United States to Mexico and U.S.aggregate demand.

of unemployment during make it easier for workers to wages.

An increase in investment causes the price level to in the short run and in the long run.