Question 1

Which would increase aggregate supply?

Accepted Answer

A)  an increase in business regulation 
B)  a decline in productivity 
C)  an increase in business subsidies 
D)  a decrease in the capital stock 
A)  an increase in business regulation 
B)  a decline in productivity 
C)  an increase in business subsidies 
D)  a decrease in the capital stock

Question 2

How is the short-run aggregate supply curve sloped and why is it sloped this way?

Accepted Answer

The short-run aggregate supply (SRAS)cur

Question 3

Other things being equal,if the national incomes of our major international lending partners were to rise,our:

Accepted Answer

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

Question 4

Productivity measures:

Accepted Answer

A)  real output per unit of input. 
B)  per unit production costs. 
C)  the changes in real wealth caused by price level changes. 
D)  the amount of capital goods used per worker. 
A)  real output per unit of input. 
B)  per unit production costs. 
C)  the changes in real wealth caused by price level changes. 
D)  the amount of capital goods used per worker.

Question 5

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.
  
-Refer to the above table.The interest rate effect of changes in the price level is shown by columns:

Accepted Answer

A)  (1)and (4)of the table. 
B)  (5)and (6)of the table. 
C)  (1)and (3)of the table. 
D)  (2)and (4)of the table. 
A)  (1)and (4)of the table. 
B)  (5)and (6)of the table. 
C)  (1)and (3)of the table. 
D)  (2)and (4)of the table.

Question 6

-In the above figure AD1 and AS1 represent the original aggregate supply and demand curves and AD2 and AS2 show the new aggregate demand and supply curves.The change in aggregate supply from AS 1 to AS2 could be caused by:

Accepted Answer

A)  a reduction in the price level. 
B)  the increased availability of entrepreneurial talent. 
C)  an increase in business taxes. 
D)  the real balances,interest-rate,and foreign trade effects. 
A)  a reduction in the price level. 
B)  the increased availability of entrepreneurial talent. 
C)  an increase in business taxes. 
D)  the real balances,interest-rate,and foreign trade effects.

Question 7

How can the aggregate demand curve be derived from the aggregate expenditures model?

Accepted Answer

The aggregate demand curve is derived fr

Question 8

-In the above figure AD1 and AS1 represent the original aggregate supply and demand curves and AD2 and AS2 show the new aggregate demand and supply curves.The changes in aggregate demand and supply in the above diagram produce:

Accepted Answer

A)  a higher price level. 
B)  an expansion of real output and a stable price level. 
C)  an expansion of real output and a higher price level. 
D)  a decline in real output and a stable price level. 
A)  a higher price level. 
B)  an expansion of real output and a stable price level. 
C)  an expansion of real output and a higher price level. 
D)  a decline in real output and a stable price level.

Question 9

An increase in the price level,other things equal,will shift the:

Accepted Answer

A)  consumption,investment,and net exports schedules of the aggregate expenditures model downward. 
B)  consumption,investment,and net exports schedules of the aggregate expenditures model upward. 
C)  consumption,and investment schedules of the aggregate expenditures model upward,but the net exports schedule downward. 
D)  consumption,and net exports schedules of the aggregate expenditures model upward,but the investment schedule downward. 
A)  consumption,investment,and net exports schedules of the aggregate expenditures model downward. 
B)  consumption,investment,and net exports schedules of the aggregate expenditures model upward. 
C)  consumption,and investment schedules of the aggregate expenditures model upward,but the net exports schedule downward. 
D)  consumption,and net exports schedules of the aggregate expenditures model upward,but the investment schedule downward.

Question 10

A decrease in aggregate demand is most likely to be caused by:

Accepted Answer

A)  an increase in the wealth of consumers. 
B)  an increase in consumer confidence. 
C)  an increase in interest rates for home mortgages. 
D)  a decrease in tax rates on household income. 
A)  an increase in the wealth of consumers. 
B)  an increase in consumer confidence. 
C)  an increase in interest rates for home mortgages. 
D)  a decrease in tax rates on household income.

Question 11

A movement upward along an existing aggregate demand curve that changes the price level is equivalent to a(n):

Accepted Answer

A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  upward shift in the aggregate expenditures schedule. 
D)  downward shift in the aggregate expenditures schedule. 
A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  upward shift in the aggregate expenditures schedule. 
D)  downward shift in the aggregate expenditures schedule.

Question 12

In the below diagram assume that the aggregate demand curve shifts from AD1 in year 1 to AD2 in year 2,only to fall back to AD1 in year 3.
  
(a)Explain what will happen to the equilibrium price level and the equilibrium level of real GDP from year 1 to year 2.
(b)Locate the new position in year 3 on the assumption that prices and wages are completely flexible downward.Label this position,Pb and GDPb for the price level and real GDP respectively.
(c)Locate the new position in year 3 on the assumption that prices and wages are completely inflexible downward.Label this position,Pc and GDPc for the price level and real GDP respectively.

Accepted Answer

(a)Equilibrium price and quant

Question 13

Would increased downward price flexibility lead to less severe or more severe recessions? Explain.

Accepted Answer

If prices were more flexible downward,a

Question 14

The following list of items are related to aggregate demand and/or aggregate supply.
  
-Refer to the above list.A change in which factor is most likely to change both aggregate demand and aggregate supply?

Accepted Answer

A)  3 
B)  5 
C)  7 
D)  9 
A)  3 
B)  5 
C)  7 
D)  9

Question 15

A movement downward along an existing aggregate demand curve is equivalent to a(n):

Accepted Answer

A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  upward shift in the aggregate expenditures schedule. 
D)  downward shift in the aggregate expenditures schedule. 
A)  decrease in aggregate demand. 
B)  increase in aggregate demand. 
C)  upward shift in the aggregate expenditures schedule. 
D)  downward shift in the aggregate expenditures schedule.

Question 16

The passage of new legislation requiring more extensive government regulation of business will most 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 17

Menu costs will:

Accepted Answer

A)  increase the amount of training of workers. 
B)  result in price wars between businesses. 
C)  increase the legal minimum wage. 
D)  make prices inflexible downward. 
A)  increase the amount of training of workers. 
B)  result in price wars between businesses. 
C)  increase the legal minimum wage. 
D)  make prices inflexible downward.

Question 18

When the price level decreases:

Accepted Answer

A)  the demand for money falls and the interest rate falls. 
B)  holders of financial assets with fixed money values decrease their spending. 
C)  holders of financial assets with fixed money values have less purchasing power. 
D)  there is a decrease in consumer spending that is sensitive to changes in interest rates. 
A)  the demand for money falls and the interest rate falls. 
B)  holders of financial assets with fixed money values decrease their spending. 
C)  holders of financial assets with fixed money values have less purchasing power. 
D)  there is a decrease in consumer spending that is sensitive to changes in interest rates.

Question 19

Refer to the diagram below.Other things equal,a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n):

Accepted Answer

A)  increase in government regulation. 
B)  increase in aggregate demand. 
C)  increase in productivity. 
D)  decline in nominal wages. 
A)  increase in government regulation. 
B)  increase in aggregate demand. 
C)  increase in productivity. 
D)  decline in nominal wages.

Question 20

The long run aggregate supply:

Accepted Answer

A)  is downward sloping. 
B)  is vertical. 
C)  is horizontal. 
D)  is upward sloping. 
A)  is downward sloping. 
B)  is vertical. 
C)  is horizontal. 
D)  is upward sloping.

Which would increase aggregate supply?

How is the short-run aggregate supply curve sloped and why is it sloped this way?

Other things being equal,if the national incomes of our major international lending partners were to rise,our:

Productivity measures:

-In the above figure AD₁ and AS₁ represent the original aggregate supply and demand curves and AD₂ and AS₂ show the new aggregate demand and supply curves.The change in aggregate supply from AS ₁ to AS₂ could be caused by:

How can the aggregate demand curve be derived from the aggregate expenditures model?

-In the above figure AD₁ and AS₁ represent the original aggregate supply and demand curves and AD₂ and AS₂ show the new aggregate demand and supply curves.The changes in aggregate demand and supply in the above diagram produce:

An increase in the price level,other things equal,will shift the:

A decrease in aggregate demand is most likely to be caused by:

A movement upward along an existing aggregate demand curve that changes the price level is equivalent to a(n):

Would increased downward price flexibility lead to less severe or more severe recessions? Explain.

The following list of items are related to aggregate demand and/or aggregate supply. -Refer to the above list.A change in which factor is most likely to change both aggregate demand and aggregate supply?

A movement downward along an existing aggregate demand curve is equivalent to a(n):

The passage of new legislation requiring more extensive government regulation of business will most likely:

Menu costs will:

When the price level decreases:

Refer to the diagram below.Other things equal,a shift of the aggregate supply curve from AS₀ to AS₁ might be caused by a(n):

The long run aggregate supply:

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

Which would increase aggregate supply?

How is the short-run aggregate supply curve sloped and why is it sloped this way?

Other things being equal,if the national incomes of our major international lending partners were to rise,our:

Productivity measures:

-In the above figure AD1 and AS1 represent the original aggregate supply and demand curves and AD2 and AS2 show the new aggregate demand and supply curves.The change in aggregate supply from AS 1 to AS2 could be caused by:

How can the aggregate demand curve be derived from the aggregate expenditures model?

-In the above figure AD1 and AS1 represent the original aggregate supply and demand curves and AD2 and AS2 show the new aggregate demand and supply curves.The changes in aggregate demand and supply in the above diagram produce:

An increase in the price level,other things equal,will shift the:

A decrease in aggregate demand is most likely to be caused by:

A movement upward along an existing aggregate demand curve that changes the price level is equivalent to a(n):

Would increased downward price flexibility lead to less severe or more severe recessions? Explain.

The following list of items are related to aggregate demand and/or aggregate supply. -Refer to the above list.A change in which factor is most likely to change both aggregate demand and aggregate supply?

A movement downward along an existing aggregate demand curve is equivalent to a(n):

The passage of new legislation requiring more extensive government regulation of business will most likely:

Menu costs will:

When the price level decreases:

Refer to the diagram below.Other things equal,a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n):

The long run aggregate supply:

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

-In the above figure AD₁ and AS₁ represent the original aggregate supply and demand curves and AD₂ and AS₂ show the new aggregate demand and supply curves.The change in aggregate supply from AS ₁ to AS₂ could be caused by:

-In the above figure AD₁ and AS₁ represent the original aggregate supply and demand curves and AD₂ and AS₂ show the new aggregate demand and supply curves.The changes in aggregate demand and supply in the above diagram produce:

Refer to the diagram below.Other things equal,a shift of the aggregate supply curve from AS₀ to AS₁ might be caused by a(n):