Question 1

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)incl

Question 2

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Accepted Answer

A) True 
 B)False

Question 3

Other things the same,as the price level rises,

Accepted Answer

A)  the dollar depreciates. 
B)  the interest rate falls. 
C)  people feel less wealthy. 
D)  All of the above are correct. 
A)  the dollar depreciates. 
B)  the interest rate falls. 
C)  people feel less wealthy. 
D)  All of the above are correct.

Question 4

Political Instability Abroad
Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets.
-Refer to Political Instability Abroad.What would the change in the exchange rate make happen to U.S.net exports and U.S.aggregate demand?

Accepted Answer

A)  Net exports would rise which by itself would increase U.S.aggregate demand. 
B)  Net exports would rise which by itself would decrease U.S.aggregate demand. 
C)  Net exports would fall which by itself would increase U.S.aggregate demand. 
D)  Net exports would fall which by itself would decrease U.S.aggregate demand. 
A)  Net exports would rise which by itself would increase U.S.aggregate demand. 
B)  Net exports would rise which by itself would decrease U.S.aggregate demand. 
C)  Net exports would fall which by itself would increase U.S.aggregate demand. 
D)  Net exports would fall which by itself would decrease U.S.aggregate demand.

Question 5

Which of the following rises during recessions?

Accepted Answer

A)  layoffs and consumer spending 
B)  layoffs but not consumer spending 
C)  consumer spending but not layoffs 
D)  neither layoffs nor consumer spending 
A)  layoffs and consumer spending 
B)  layoffs but not consumer spending 
C)  consumer spending but not layoffs 
D)  neither layoffs nor consumer spending

Question 6

During World War II,the economy's production increased about

Accepted Answer

A)  25 percent and prices rose about 5 percent. 
B)  50 percent and prices rose about 10 percent. 
C)  75 percent and prices rose about 15 percent. 
D)  100 percent and prices rose about 20 percent. 
A)  25 percent and prices rose about 5 percent. 
B)  50 percent and prices rose about 10 percent. 
C)  75 percent and prices rose about 15 percent. 
D)  100 percent and prices rose about 20 percent.

Question 7

The price level rises in the short run if

Accepted Answer

A)  aggregate demand or aggregate supply shifts right. 
B)  aggregate demand shifts right or aggregate supply shifts left. 
C)  aggregate demand shifts left or aggregate supply shifts right. 
D)  aggregate demand or aggregate supply shifts right 
A)  aggregate demand or aggregate supply shifts right. 
B)  aggregate demand shifts right or aggregate supply shifts left. 
C)  aggregate demand shifts left or aggregate supply shifts right. 
D)  aggregate demand or aggregate supply shifts right

Question 8

During World War II government expenditures increased almost five-fold and output almost doubled.

Accepted Answer

A) True 
 B)False

Question 9

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP,argue that declines in these variables are to be expected.

Accepted Answer

Variables that fall along with real GDP

Question 10

Other things the same,if the price level rises,people

Accepted Answer

A)  increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases. 
B)  increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases. 
C)  decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases. 
D)  decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases. 
A)  increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases. 
B)  increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases. 
C)  decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases. 
D)  decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases.

Question 11

Historical evidence for the U.S.economy indicates that

Accepted Answer

A)  recessions have occurred roughly once every six years since the 1960s. 
B)  the unemployment rate usually decreases during a recession and increases shortly after the recession ends. 
C)  real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends. 
D)  changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle. 
A)  recessions have occurred roughly once every six years since the 1960s. 
B)  the unemployment rate usually decreases during a recession and increases shortly after the recession ends. 
C)  real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends. 
D)  changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle.

Question 12

As the price level falls

Accepted Answer

A)  people will want to buy more bonds,so the interest rate rises. 
B)  people will want to buy fewer bonds,so the interest rate falls. 
C)  people will want to buy more bonds,so the interest rate falls. 
D)  people will want to buy fewer bonds,so the interest rate rises. 
A)  people will want to buy more bonds,so the interest rate rises. 
B)  people will want to buy fewer bonds,so the interest rate falls. 
C)  people will want to buy more bonds,so the interest rate falls. 
D)  people will want to buy fewer bonds,so the interest rate rises.

Question 13

Pessimism
Suppose the economy is in long-run equilibrium.Then because of corporate scandal,international tensions,and loss of confidence in policymakers,people become pessimistic regarding the future and retain that level of pessimism for some time.
-Refer to Pessimism.Which curve shifts and in which direction?

Accepted Answer

A)  aggregate demand shifts right 
B)  aggregate demand shifts left 
C)  aggregate supply shifts right. 
D)  aggregate supply shifts left. 
A)  aggregate demand shifts right 
B)  aggregate demand shifts left 
C)  aggregate supply shifts right. 
D)  aggregate supply shifts left.

Question 14

If aggregate demand and aggregate supply both shift right,we can be sure that the price level is higher in the short run.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following shifts the short-run aggregate supply curve to the right?

Accepted Answer

A)  a decrease in the actual price level 
B)  an increase in the actual price level 
C)  a decrease in the expected price level 
D)  an increase in the expected price level 
A)  a decrease in the actual price level 
B)  an increase in the actual price level 
C)  a decrease in the expected price level 
D)  an increase in the expected price level

Question 17

A decrease in the availability of an important major resource such as oil shifts

Accepted Answer

A)  aggregate supply right. 
B)  aggregate supply left. 
C)  aggregate demand right. 
D)  aggregate demand left. 
A)  aggregate supply right. 
B)  aggregate supply left. 
C)  aggregate demand right. 
D)  aggregate demand left.

Question 18

When the dollar depreciates,U.S.

Accepted Answer

A)  exports and imports increase. 
B)  exports increase,while imports decrease. 
C)  exports decrease,while imports increase. 
D)  exports and imports decrease. 
A)  exports and imports increase. 
B)  exports increase,while imports decrease. 
C)  exports decrease,while imports increase. 
D)  exports and imports decrease.

Question 19

The long-run aggregate supply curve would shift right if immigration from abroad

Accepted Answer

A)  increased or Congress made a substantial increase in the minimum wage. 
B)  decreased or Congress abolished the minimum wage. 
C)  increased or Congress abolished the minimum wage. 
D)  decreased or Congress made a substantial increase in the minimum wage. 
A)  increased or Congress made a substantial increase in the minimum wage. 
B)  decreased or Congress abolished the minimum wage. 
C)  increased or Congress abolished the minimum wage. 
D)  decreased or Congress made a substantial increase in the minimum wage.

Question 20

Aggregate demand shifts right if

Accepted Answer

A)  taxes rise and shifts left if stock prices rise. 
B)  taxes rise and shifts left if stock prices fall. 
C)  taxes fall and shifts left if stock prices rise. 
D)  taxes fall and shifts left is stock prices fall. 
A)  taxes rise and shifts left if stock prices rise. 
B)  taxes rise and shifts left if stock prices fall. 
C)  taxes fall and shifts left if stock prices rise. 
D)  taxes fall and shifts left is stock prices fall.

Exam 23: Aggregate Demand and Aggregate Supply

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

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Other things the same,as the price level rises,

Which of the following rises during recessions?

During World War II,the economy's production increased about

The price level rises in the short run if

During World War II government expenditures increased almost five-fold and output almost doubled.

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP,argue that declines in these variables are to be expected.

Other things the same,if the price level rises,people

Historical evidence for the U.S.economy indicates that

As the price level falls

If aggregate demand and aggregate supply both shift right,we can be sure that the price level is higher in the short run.

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

Which of the following shifts the short-run aggregate supply curve to the right?

A decrease in the availability of an important major resource such as oil shifts

When the dollar depreciates,U.S.

The long-run aggregate supply curve would shift right if immigration from abroad

Aggregate demand shifts right if

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 Costs of Production

Firms in Competitive Markets

Monopoly

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

The Influence of Monetary and Fiscal Policy on Aggregate Demand

Filters