Question 1

A large decrease in oil prices is an example of:

Accepted Answer

A) a positive inflation shock. 
B) a negative inflation shock. 
C) inflation inertia. 
D) excessive aggregate spending. 
A) a positive inflation shock. 
B) a negative inflation shock. 
C) inflation inertia. 
D) excessive aggregate spending.

Question 2

If households and firms increase their expectation for the rate of inflation,the ______ curve will shift _____.

Accepted Answer

A) AD;rightward 
B) AS;rightward 
C) AS;leftward 
D) AS;upward 
A) AD;rightward 
B) AS;rightward 
C) AS;leftward 
D) AS;upward

Question 3

When using the AD-AS model to understand business cycles,the question,"what are the fundamental causes of business cycles?" can be thought of as the question:

Accepted Answer

A) "what factors move the economy away from long-run equilibrium?" 
B) "what factors move aggregate demand and aggregate supply in different directions?" 
C) "what factors increase or decrease potential GDP?" 
D) "what factors increase or decrease the expected rate of inflation?" 
A) "what factors move the economy away from long-run equilibrium?" 
B) "what factors move aggregate demand and aggregate supply in different directions?" 
C) "what factors increase or decrease potential GDP?" 
D) "what factors increase or decrease the expected rate of inflation?"

Question 4

Suppose the economy is currently operating at potential output;an expansionary gap may be caused by each of the following EXCEPT:

Accepted Answer

A) a positive demand shock. 
B) a positive inflation shock. 
C) an increase in government spending. 
D) an increase in the inflation rate. 
A) a positive demand shock. 
B) a positive inflation shock. 
C) an increase in government spending. 
D) an increase in the inflation rate.

Question 5

A sudden increase in household wealth is an example of a ______ demand shock,which would shift the AD curve to the ______.

Accepted Answer

A) negative;left 
B) positive;left 
C) negative;right 
D) positive;right 
A) negative;left 
B) positive;left 
C) negative;right 
D) positive;right

Question 6

The AD curve slopes downward because an increase in ______ causes ______ to fall,which in turn causes real GDP to fall.

Accepted Answer

A) the inflation rate;planned spending 
B) planned spending;the inflation rate 
C) real GDP;planned spending 
D) real GDP;the unemployment rate 
A) the inflation rate;planned spending 
B) planned spending;the inflation rate 
C) real GDP;planned spending 
D) real GDP;the unemployment rate

Question 7

If the interest rate in the U.S.rises,U.S.financial assets become ______ attractive to buyers and the ______ U.S.dollars will rise.

Accepted Answer

A) more;demand for 
B) more;supply of 
C) less;demand for 
D) less;supply of 
A) more;demand for 
B) more;supply of 
C) less;demand for 
D) less;supply of

Question 8

The Great Recession was the result of:

Accepted Answer

A) two negative demand shocks. 
B) a negative demand shock and a negative inflation shock. 
C) two positive inflation shocks. 
D) a negative demand shock and a positive inflation shock. 
A) two negative demand shocks. 
B) a negative demand shock and a negative inflation shock. 
C) two positive inflation shocks. 
D) a negative demand shock and a positive inflation shock.

Question 9

When actual output is less than potential output,there is ____ output gap and the rate of inflation will tend to ____.

Accepted Answer

A) an expansionary;increase 
B) an expansionary;decrease 
C) a recessionary;decrease 
D) a recessionary;increase 
A) an expansionary;increase 
B) an expansionary;decrease 
C) a recessionary;decrease 
D) a recessionary;increase

Question 10

When the interest rate in the U.S.falls,U.S.financial assets:

Accepted Answer

A) become more attractive to foreign buyers. 
B) become less attractive to both foreign and domestic buyers. 
C) become more attractive to both foreign and domestic buyers. 
D) become less attractive to domestic buyers and more attractive to foreign buyers. 
A) become more attractive to foreign buyers. 
B) become less attractive to both foreign and domestic buyers. 
C) become more attractive to both foreign and domestic buyers. 
D) become less attractive to domestic buyers and more attractive to foreign buyers.

A large decrease in oil prices is an example of:

If households and firms increase their expectation for the rate of inflation,the __ curve will shift _.

When using the AD-AS model to understand business cycles,the question,"what are the fundamental causes of business cycles?" can be thought of as the question:

Suppose the economy is currently operating at potential output;an expansionary gap may be caused by each of the following EXCEPT:

A sudden increase in household wealth is an example of a demand shock,which would shift the AD curve to the .

The AD curve slopes downward because an increase in causes to fall,which in turn causes real GDP to fall.

If the interest rate in the U.S.rises,U.S.financial assets become attractive to buyers and the U.S.dollars will rise.

The Great Recession was the result of:

When actual output is less than potential output,there is output gap and the rate of inflation will tend to .

When the interest rate in the U.S.falls,U.S.financial assets:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 24: Aggregate Demand, Aggregate Supply, and Business Cycles

A large decrease in oil prices is an example of:

If households and firms increase their expectation for the rate of inflation,the ______ curve will shift _____.

When using the AD-AS model to understand business cycles,the question,"what are the fundamental causes of business cycles?" can be thought of as the question:

Suppose the economy is currently operating at potential output;an expansionary gap may be caused by each of the following EXCEPT:

A sudden increase in household wealth is an example of a ______ demand shock,which would shift the AD curve to the ______.

The AD curve slopes downward because an increase in ______ causes ______ to fall,which in turn causes real GDP to fall.

If the interest rate in the U.S.rises,U.S.financial assets become ______ attractive to buyers and the ______ U.S.dollars will rise.

The Great Recession was the result of:

When actual output is less than potential output,there is ____ output gap and the rate of inflation will tend to ____.

When the interest rate in the U.S.falls,U.S.financial assets:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

If households and firms increase their expectation for the rate of inflation,the __ curve will shift _.

A sudden increase in household wealth is an example of a demand shock,which would shift the AD curve to the .

The AD curve slopes downward because an increase in causes to fall,which in turn causes real GDP to fall.

If the interest rate in the U.S.rises,U.S.financial assets become attractive to buyers and the U.S.dollars will rise.

When actual output is less than potential output,there is output gap and the rate of inflation will tend to .