Question 1

The foreign trade effect:

Accepted Answer

A)  shifts the aggregate demand curve rightward. 
B)  shifts the aggregate demand curve leftward. 
C)  shifts the aggregate supply curve rightward. 
D)  does none of the above. 
A)  shifts the aggregate demand curve rightward. 
B)  shifts the aggregate demand curve leftward. 
C)  shifts the aggregate supply curve rightward. 
D)  does none of the above.

Question 2

Economists think of three different aggregate supply curves based upon the time frame of observation.Briefly describe each.

Accepted Answer

The aggregate supply curve describes the

Question 3

Identify the ways in which each of the following determinants would have to change to cause a decrease in aggregate demand: consumer wealth,consumer expectations,business taxes,national income in countries abroad,exchange rates.

Accepted Answer

To decrease aggregate demand,consumer we

Question 4

The following aggregate demand and supply schedules are for a hypothetical economy:
  
-Refer to the above data.The change in aggregate demand indicated in the previous question might have been caused by:

Accepted Answer

A)  an increase in net exports. 
B)  a worsening of business expectations. 
C)  an increase in consumer wealth. 
D)  a decrease in the personal income tax. 
A)  an increase in net exports. 
B)  a worsening of business expectations. 
C)  an increase in consumer wealth. 
D)  a decrease in the personal income tax.

Question 5

In the late 1990s and early 2000s:

Accepted Answer

A)  both AD and AS increased 
B)  inflation was relatively high. 
C)  AD increased but AS decreased. 
D)  AD decreased but AS increased. 
A)  both AD and AS increased 
B)  inflation was relatively high. 
C)  AD increased but AS decreased. 
D)  AD decreased but AS increased.

Question 6

Cost-push inflation occurs because of a:

Accepted Answer

A)  rightward shift in the aggregate demand curve. 
B)  leftward shift in the aggregate demand curve. 
C)  rightward shift in the aggregate supply curve. 
D)  leftward shift in the aggregate supply curve. 
A)  rightward shift in the aggregate demand curve. 
B)  leftward shift in the aggregate demand curve. 
C)  rightward shift in the aggregate supply curve. 
D)  leftward shift in the aggregate supply curve.

Question 7

If there is a decrease in the price level,then it will increase aggregate expenditures and this change is equivalent to a(n):

Accepted Answer

A)  increase in aggregate supply. 
B)  increase in aggregate demand. 
C)  decrease in aggregate demand. 
D)  movement along an aggregate demand curve. 
A)  increase in aggregate supply. 
B)  increase in aggregate demand. 
C)  decrease in aggregate demand. 
D)  movement along an aggregate demand curve.

Question 8

List three events that would shift the short-run aggregate supply curve leftward.

Accepted Answer

Some possibilities are a rise in the pri

Question 9

An increase in net exports can be expected to shift the:

Accepted Answer

A)  aggregate expenditures curve upward and the aggregate demand curve rightward. 
B)  aggregate expenditures curve upward and the aggregate demand curve leftward. 
C)  aggregate expenditures curve downward and the aggregate demand curve rightward. 
D)  aggregate expenditures curve downward and the aggregate demand curve leftward. 
A)  aggregate expenditures curve upward and the aggregate demand curve rightward. 
B)  aggregate expenditures curve upward and the aggregate demand curve leftward. 
C)  aggregate expenditures curve downward and the aggregate demand curve rightward. 
D)  aggregate expenditures curve downward and the aggregate demand curve leftward.

Question 10

-Refer to the above diagram.If the aggregate supply curve shifted from AS0 to AS1,we could say that:

Accepted Answer

A)  aggregate supply has increased,equilibrium output has decreased,and the price level has increased. 
B)  aggregate supply has decreased,equilibrium output has decreased,and the price level has increased. 
C)  an increase in the amount of output supplied has occurred. 
D)  aggregate supply has increased and the price level has risen to G. 
A)  aggregate supply has increased,equilibrium output has decreased,and the price level has increased. 
B)  aggregate supply has decreased,equilibrium output has decreased,and the price level has increased. 
C)  an increase in the amount of output supplied has occurred. 
D)  aggregate supply has increased and the price level has risen to G.

Question 11

Refer to the information below.A change in net export spending would most likely be caused by changes in:
The following list of factors is related to the aggregate demand curve.

Accepted Answer

A)  2 and 3. 
B)  5 and 6. 
C)  7 and 8. 
D)  6 and 9. 
A)  2 and 3. 
B)  5 and 6. 
C)  7 and 8. 
D)  6 and 9.

Question 12

-Refer to the above diagram.At the equilibrium price and quantity:

Accepted Answer

A)  aggregate demand exceeds aggregate supply. 
B)  the amount of real output demanded and supplied are equal. 
C)  aggregate demand equals aggregate supply. 
D)  aggregate supply exceeds aggregate demand. 
A)  aggregate demand exceeds aggregate supply. 
B)  the amount of real output demanded and supplied are equal. 
C)  aggregate demand equals aggregate supply. 
D)  aggregate supply exceeds aggregate demand.

Question 13

A change in business taxes and regulation can affect input prices and aggregate supply.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to the above diagram.If aggregate supply is AS1 and aggregate demand is AD0,then:

Accepted Answer

A)  at any price level above G a shortage of real output would occur. 
B)  F represents a price level which would result in a surplus of real output of AC. 
C)  a surplus of real output of GH would occur. 
D)  F represents a price level which would result in a shortage of real output of AC. 
A)  at any price level above G a shortage of real output would occur. 
B)  F represents a price level which would result in a surplus of real output of AC. 
C)  a surplus of real output of GH would occur. 
D)  F represents a price level which would result in a shortage of real output of AC.

Question 15

What are five reasons for the downward price-level inflexibility,especially as it pertains to wages and prices?

Accepted Answer

First,wage contracts will fix wages for

Question 16

Other things equal,an improvement in productivity will:

Accepted Answer

A)  shift the aggregate demand curve to the left. 
B)  shift the aggregate supply curve to the left. 
C)  shift the aggregate supply curve to the right. 
D)  increase the price level. 
A)  shift the aggregate demand curve to the left. 
B)  shift the aggregate supply curve to the left. 
C)  shift the aggregate supply curve to the right. 
D)  increase the price level.

Question 17

The economy experiences an increase in the price level and a decrease in real domestic output.Which is a likely explanation?

Accepted Answer

A)  productivity has increased 
B)  input prices have increased 
C)  excess capacity has decreased 
D)  government regulations have been reduced 
A)  productivity has increased 
B)  input prices have increased 
C)  excess capacity has decreased 
D)  government regulations have been reduced

Question 18

The following table is for a particular country in which C is consumption expenditures,IS1U1B1gS1U1B0 is gross investment expenditures,G is government expenditures,X is exports,and M is imports.All figures are in billions of dollars.Each question is independent of the other questions.
  
-Refer to the above table.If the aggregate supply schedule intersects the aggregate demand at price level 119 in this country,its equilibrium level of real GDP will be:

Accepted Answer

A)  $37 billion. 
B)  $35 billion. 
C)  $26 billion. 
D)  $43 billion. 
A)  $37 billion. 
B)  $35 billion. 
C)  $26 billion. 
D)  $43 billion.

Question 19

Which of the following is true of aggregate supply in the long run?

Accepted Answer

A)  Nominal wages and output prices are both fixed. 
B)  Nominal wages are fixed but output prices can vary. 
C)  Output prices are fixed. 
D)  Nominal wages are fully responsive to changes in the price level. 
A)  Nominal wages and output prices are both fixed. 
B)  Nominal wages are fixed but output prices can vary. 
C)  Output prices are fixed. 
D)  Nominal wages are fully responsive to changes in the price level.

Question 20

What determines the equilibrium price level and the level of real GDP in the aggregate demand-aggregate supply (short-run)model?

Accepted Answer

The interaction of short-run aggregate s

The foreign trade effect:

Economists think of three different aggregate supply curves based upon the time frame of observation.Briefly describe each.

Identify the ways in which each of the following determinants would have to change to cause a decrease in aggregate demand: consumer wealth,consumer expectations,business taxes,national income in countries abroad,exchange rates.

The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data.The change in aggregate demand indicated in the previous question might have been caused by:

In the late 1990s and early 2000s:

Cost-push inflation occurs because of a:

If there is a decrease in the price level,then it will increase aggregate expenditures and this change is equivalent to a(n):

List three events that would shift the short-run aggregate supply curve leftward.

An increase in net exports can be expected to shift the:

-Refer to the above diagram.If the aggregate supply curve shifted from AS₀ to AS₁,we could say that:

Refer to the information below.A change in net export spending would most likely be caused by changes in: The following list of factors is related to the aggregate demand curve.

-Refer to the above diagram.At the equilibrium price and quantity:

A change in business taxes and regulation can affect input prices and aggregate supply.

-Refer to the above diagram.If aggregate supply is AS₁ and aggregate demand is AD₀,then:

What are five reasons for the downward price-level inflexibility,especially as it pertains to wages and prices?

Other things equal,an improvement in productivity will:

The economy experiences an increase in the price level and a decrease in real domestic output.Which is a likely explanation?

Which of the following is true of aggregate supply in the long run?

What determines the equilibrium price level and the level of real GDP in the aggregate demand-aggregate supply (short-run)model?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 12: Aggregate Demand and Aggregate Supply

The foreign trade effect:

Economists think of three different aggregate supply curves based upon the time frame of observation.Briefly describe each.

Identify the ways in which each of the following determinants would have to change to cause a decrease in aggregate demand: consumer wealth,consumer expectations,business taxes,national income in countries abroad,exchange rates.

The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data.The change in aggregate demand indicated in the previous question might have been caused by:

In the late 1990s and early 2000s:

Cost-push inflation occurs because of a:

If there is a decrease in the price level,then it will increase aggregate expenditures and this change is equivalent to a(n):

List three events that would shift the short-run aggregate supply curve leftward.

An increase in net exports can be expected to shift the:

-Refer to the above diagram.If the aggregate supply curve shifted from AS0 to AS1,we could say that:

Refer to the information below.A change in net export spending would most likely be caused by changes in: The following list of factors is related to the aggregate demand curve.

-Refer to the above diagram.At the equilibrium price and quantity:

A change in business taxes and regulation can affect input prices and aggregate supply.

-Refer to the above diagram.If aggregate supply is AS1 and aggregate demand is AD0,then:

What are five reasons for the downward price-level inflexibility,especially as it pertains to wages and prices?

Other things equal,an improvement in productivity will:

The economy experiences an increase in the price level and a decrease in real domestic output.Which is a likely explanation?

Which of the following is true of aggregate supply in the long run?

What determines the equilibrium price level and the level of real GDP in the aggregate demand-aggregate supply (short-run)model?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

-Refer to the above diagram.If the aggregate supply curve shifted from AS₀ to AS₁,we could say that:

-Refer to the above diagram.If aggregate supply is AS₁ and aggregate demand is AD₀,then: