Question 1

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Accepted Answer

A) Decreases in the price level raise the interest rate and increase consumption spending. 
B) Decreases in the price level raise the interest rate and increase investment spending. 
C) Decreases in the U.S.price level relative to the price level in other countries lower net exports. 
D) Decreases in the price level raise real wealth and increase consumption spending. 
A) Decreases in the price level raise the interest rate and increase consumption spending. 
B) Decreases in the price level raise the interest rate and increase investment spending. 
C) Decreases in the U.S.price level relative to the price level in other countries lower net exports. 
D) Decreases in the price level raise real wealth and increase consumption spending.

Question 2

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

Accepted Answer

Aggregate demand inc

Question 3

An increase 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.

Question 4

If workers leave a country to seek out better opportunities in another country,then this will

Accepted Answer

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

Question 5

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Accepted Answer

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

Question 6

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

Accepted Answer

A) SRAS shifted to the right by more than LRAS. 
B) AD shifted to the right by more than SRAS. 
C) AD shifted to the right by less than SRAS. 
D) SRAS and AD do not shift. 
A) SRAS shifted to the right by more than LRAS. 
B) AD shifted to the right by more than SRAS. 
C) AD shifted to the right by less than SRAS. 
D) SRAS and AD do not shift.

Question 7

The recession of 2007-2009 began in ________,with the end of the economic expansion that had begun in ________.

Accepted Answer

A) January 2007; April 1984 
B) December 2007; November 2001 
C) July 2007; August 2006 
D) March 2007; March 1995 
A) January 2007; April 1984 
B) December 2007; November 2001 
C) July 2007; August 2006 
D) March 2007; March 1995

Question 8

If the U.S.dollar decreases in value relative to other currencies,how does this affect the aggregate demand curve?

Accepted Answer

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

Question 9

Figure 13-2  
-Refer to Figure 13-2.Ceteris paribus,an increase in the number of workers and firms adjusting to having previously overestimated the 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 10

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

Accepted Answer

A) business fixed investment spending rose and net export spending declined 
B) consumption spending rose and residential construction spending declined 
C) federal government purchases rose and changes in business inventories declined 
D) net export spending rose and consumption spending declined 
A) business fixed investment spending rose and net export spending declined 
B) consumption spending rose and residential construction spending declined 
C) federal government purchases rose and changes in business inventories declined 
D) net export spending rose and consumption spending declined

Question 11

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 12

For the recession of 2007-2009,it took ________ for employment to return to its cyclical peak.

Accepted Answer

A) about 18 months 
B) about 2.5 years 
C) about 3.5 years 
D) more than 6 years 
A) about 18 months 
B) about 2.5 years 
C) about 3.5 years 
D) more than 6 years

Question 13

Inflation will

Accepted Answer

A) increase aggregate demand. 
B) increase the quantity of real GDP demanded. 
C) decrease aggregate demand. 
D) decrease the quantity of real GDP demanded. 
A) increase aggregate demand. 
B) increase the quantity of real GDP demanded. 
C) decrease aggregate demand. 
D) decrease the quantity of real GDP demanded.

Question 14

When potential GDP increases,long-run aggregate supply also increases.

Accepted Answer

A) True 
 B)False

Question 15

The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off

Accepted Answer

A) government spending. 
B) government spending and unplanned investment. 
C) investment and consumption spending. 
D) net exports. 
A) government spending. 
B) government spending and unplanned investment. 
C) investment and consumption spending. 
D) net exports.

Question 16

According to Marx,which of the following factors of production did not contribute anything of value to production?

Accepted Answer

A) labor 
B) capital 
C) natural resources 
D) entrepreneurship 
A) labor 
B) capital 
C) natural resources 
D) entrepreneurship

Question 17

Explain how each of the following events would affect the short-run aggregate supply curve.
a.A decrease in the price level
b.A decrease in what the price level is expected to be in the future
c.A price level that is currently lower than expected
d.An unexpected decrease in the price of an important raw material
e.A decrease in the labor force

Accepted Answer

a.A lower price level would cause a move

Question 18

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 19

A negative supply shock in the short run causes

Accepted Answer

A) the aggregate supply curve to shift to the left. 
B) the price level to fall. 
C) unemployment to fall. 
D) equilibrium real GDP to rise. 
A) the aggregate supply curve to shift to the left. 
B) the price level to fall. 
C) unemployment to fall. 
D) equilibrium real GDP to rise.

Question 20

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.

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

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

An increase in the price level will

If workers leave a country to seek out better opportunities in another country,then this will

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

The recession of 2007-2009 began in ,with the end of the economic expansion that had begun in .

If the U.S.dollar decreases in value relative to other currencies,how does this affect the aggregate demand curve?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the number of workers and firms adjusting to having previously overestimated the price level would be represented by a movement from

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

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

For the recession of 2007-2009,it took ________ for employment to return to its cyclical peak.

Inflation will

When potential GDP increases,long-run aggregate supply also increases.

The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off

According to Marx,which of the following factors of production did not contribute anything of value to production?

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

A negative supply shock in the short run causes

Full-employment GDP is also known as

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

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

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

An increase in the price level will

If workers leave a country to seek out better opportunities in another country,then this will

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?

The recession of 2007-2009 began in ________,with the end of the economic expansion that had begun in ________.

If the U.S.dollar decreases in value relative to other currencies,how does this affect the aggregate demand curve?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the number of workers and firms adjusting to having previously overestimated the price level would be represented by a movement from

During the recession of 2007-2009 in the United States,________ relative to potential GDP.

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

For the recession of 2007-2009,it took ________ for employment to return to its cyclical peak.

Inflation will

When potential GDP increases,long-run aggregate supply also increases.

The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off

According to Marx,which of the following factors of production did not contribute anything of value to production?

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

A negative supply shock in the short run causes

Full-employment GDP is also known as

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

The recession of 2007-2009 began in ,with the end of the economic expansion that had begun in .

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.