Question 1

A decrease in confidence will immediately shift

Accepted Answer

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

Question 2

The rationale for exchange rates determining AD is with

Accepted Answer

A) stronger dollar exports will fall AD will rise 
B) stronger dollar imports will fall AD will rise. 
C) weaker dollar exports will fall AD will rise. 
D) weaker dollar imports will fall AD will rise. 
A) stronger dollar exports will fall AD will rise 
B) stronger dollar imports will fall AD will rise. 
C) weaker dollar exports will fall AD will rise. 
D) weaker dollar imports will fall AD will rise.

Question 3

A decrease in interest rates will cause

Accepted Answer

A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left). 
A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left).

Question 4

Policy initiatives typically associated with "supply-side economics" would include

Accepted Answer

A) increased spending for national defense. 
B) increases in the minimum wage. 
C) investment tax credits. 
D) reduced minimum reserve requirements. 
A) increased spending for national defense. 
B) increases in the minimum wage. 
C) investment tax credits. 
D) reduced minimum reserve requirements.

Question 5

An increase in input prices will cause

Accepted Answer

A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left). 
A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left).

Question 6

The aggregate supply-aggregate demand diagram relates various levels of

Accepted Answer

A) production of two different goods. 
B) all prices as measured by the CPI and production as measured by real GDP. 
C) imports and exports of goods against exchange rates. 
D) the price and quantity of a particular good. 
A) production of two different goods. 
B) all prices as measured by the CPI and production as measured by real GDP. 
C) imports and exports of goods against exchange rates. 
D) the price and quantity of a particular good.

Question 7

Disagreements about the shape of the aggregate supply curve focus on the degree of _________ in the economy.

Accepted Answer

A) unemployment 
B) inflation 
C) fraud 
D) confidence 
A) unemployment 
B) inflation 
C) fraud 
D) confidence

Question 8

Suppose the U.S. was to experience a series of terrorists' attacks aimed at keeping consumers away from large shopping areas. Suppose further that the primary effect is for consumer confidence to decrease, this would likely

Accepted Answer

A) increase aggregate demand. 
B) increase aggregate supply. 
C) decrease aggregate demand. 
D) decrease aggregate supply. 
A) increase aggregate demand. 
B) increase aggregate supply. 
C) decrease aggregate demand. 
D) decrease aggregate supply.

Question 9

When domestic prices rise

Accepted Answer

A) the buying power of cash assets rises. 
B) interest sensitive consumption falls because interest rates rise. 
C) exports rise. 
D) business investment rises because interest rates fall. 
A) the buying power of cash assets rises. 
B) interest sensitive consumption falls because interest rates rise. 
C) exports rise. 
D) business investment rises because interest rates fall.

Question 10

A decrease in productivity will shift

Accepted Answer

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

Question 11

When trying to move the economy out of recession, the Democratic Party is more likely than the Republican Party to focus on

Accepted Answer

A) demand side policies. 
B) supply side policies. 
C) regulatory policies. 
D) demand side and supply side policies. 
A) demand side policies. 
B) supply side policies. 
C) regulatory policies. 
D) demand side and supply side policies.

Question 12

An increase in confidence will immediately shift

Accepted Answer

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

Question 13

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 3 should be filled with

Accepted Answer

A) PI for Price Index. 
B) RGDP for Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand. 
A) PI for Price Index. 
B) RGDP for Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand.

Question 14

An increase in taxes will cause

Accepted Answer

A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left). 
A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left).

Question 15

The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is

Accepted Answer

A) downward sloping. 
B) horizontal. 
C) vertical. 
D) shaped as a backward L. 
A) downward sloping. 
B) horizontal. 
C) vertical. 
D) shaped as a backward L.

Question 16

The notion of the "classical range" was one of the basic parts of the

Accepted Answer

A) supply curve. 
B) present value curve. 
C) aggregate demand curve. 
D) aggregate supply curve. 
A) supply curve. 
B) present value curve. 
C) aggregate demand curve. 
D) aggregate supply curve.

Question 17

A decrease in productivity will cause

Accepted Answer

A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left). 
A) AD to increase (move to the right). 
B) AD to decrease (move to the left). 
C) AS to increase (move to down and to the right). 
D) AS to decrease (move to up and to the left).

Question 18

If there was a significant find of natural gas in a readily accessible location in the U.S. this would likely

Accepted Answer

A) increase aggregate demand. 
B) increase aggregate supply. 
C) decrease aggregate demand. 
D) decrease aggregate supply. 
A) increase aggregate demand. 
B) increase aggregate supply. 
C) decrease aggregate demand. 
D) decrease aggregate supply.

Question 19

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 2 should be filled with

Accepted Answer

A) PI* for macroeconomic equilibrium Price Index. 
B) RGDP* for macroeconomic equilibrium Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand. 
A) PI* for macroeconomic equilibrium Price Index. 
B) RGDP* for macroeconomic equilibrium Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand.

Question 20

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 4 should be filled with

Accepted Answer

A) PI for Price Index. 
B) RGDP for Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand. 
A) PI for Price Index. 
B) RGDP for Real Gross Domestic Product. 
C) AS for Aggregate Supply. 
D) AD for Aggregate Demand.

Exam 8: Aggregate Demand and Aggregate Supply

A decrease in confidence will immediately shift

The rationale for exchange rates determining AD is with

A decrease in interest rates will cause

Policy initiatives typically associated with "supply-side economics" would include

An increase in input prices will cause

The aggregate supply-aggregate demand diagram relates various levels of

Disagreements about the shape of the aggregate supply curve focus on the degree of _________ in the economy.

Suppose the U.S. was to experience a series of terrorists' attacks aimed at keeping consumers away from large shopping areas. Suppose further that the primary effect is for consumer confidence to decrease, this would likely

When domestic prices rise

A decrease in productivity will shift

When trying to move the economy out of recession, the Democratic Party is more likely than the Republican Party to focus on

An increase in confidence will immediately shift

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 3 should be filled with

An increase in taxes will cause

The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is

The notion of the "classical range" was one of the basic parts of the

A decrease in productivity will cause

If there was a significant find of natural gas in a readily accessible location in the U.S. this would likely

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 2 should be filled with

-In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 4 should be filled with

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Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

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