Question 1

When the dollar appreciates,U.S.net exports fall and aggregate demand decreases.

Accepted Answer

A) True 
 B)False

Question 2

In a two-country world,an increase in foreign input prices,ceteris paribus,

Accepted Answer

A) shifts the SRAS curve leftward,causing the price level to increase. 
B) shifts the SRAS curve leftward,causing the price level to decrease. 
C) shifts the SRAS curve rightward,causing the price level to increase. 
D) shifts the SRAS curve rightward,causing the price level to decrease. 
E) does not affect the SRAS curve or the price level. 
A) shifts the SRAS curve leftward,causing the price level to increase. 
B) shifts the SRAS curve leftward,causing the price level to decrease. 
C) shifts the SRAS curve rightward,causing the price level to increase. 
D) shifts the SRAS curve rightward,causing the price level to decrease. 
E) does not affect the SRAS curve or the price level.

Question 3

A change in Real GDP in the short run can be brought about by a change in

Accepted Answer

A) the exchange rate. 
B) labor productivity. 
C) expectations of future sales. 
D) wealth. 
E) all of the above 
A) the exchange rate. 
B) labor productivity. 
C) expectations of future sales. 
D) wealth. 
E) all of the above

Question 4

Which set of changes is definitely predicted to raise Real GDP in the short run?

Accepted Answer

A) Wealth increases and there is an adverse supply shock. 
B) Individuals expect higher (future)incomes and wage rates fall. 
C) Business taxes rise and wage rates fall. 
D) The U.S.dollar appreciates and there is a beneficial supply shock. 
E) none of the above 
A) Wealth increases and there is an adverse supply shock. 
B) Individuals expect higher (future)incomes and wage rates fall. 
C) Business taxes rise and wage rates fall. 
D) The U.S.dollar appreciates and there is a beneficial supply shock. 
E) none of the above

Question 5

An increase in the money supply may __________ total expenditures,leading to a __________ shift of the AD curve.

Accepted Answer

A) increase;rightward 
B) increase;leftward 
C) decrease;rightward 
D) decrease;leftward 
A) increase;rightward 
B) increase;leftward 
C) decrease;rightward 
D) decrease;leftward

Question 6

If businesses buy fewer capital goods,and nothing else changes,then total expenditures on U.S.goods and services will decrease.And if total expenditures decrease,then __________ will decrease;consequently,the __________ curve will shift __________.

Accepted Answer

A) aggregate demand (A
D) ;AD;rightward 
B) short-run aggregate supply (SRAS);SRAS;leftward 
C) aggregate demand (A
D) ;AD;leftward 
D) interest rates;AD;leftward 
E) prices;AD;rightward 
A) aggregate demand (A
D) ;AD;rightward 
B) short-run aggregate supply (SRAS);SRAS;leftward 
C) aggregate demand (A
D) ;AD;leftward 
D) interest rates;AD;leftward 
E) prices;AD;rightward

Question 7

The real balance effect is the change in

Accepted Answer

A) purchasing power that results from a change in income. 
B) the amount of money one has that results from a change in income. 
C) purchasing power that results from a change in the price level. 
D) the amount of money one has that results from a change in the price level. 
E) none of the above 
A) purchasing power that results from a change in income. 
B) the amount of money one has that results from a change in income. 
C) purchasing power that results from a change in the price level. 
D) the amount of money one has that results from a change in the price level. 
E) none of the above

Question 8

Which of the following statements is true?

Accepted Answer

A) A decrease in wage rates will shift the SRAS curve to the left. 
B) An adverse supply shock will shift the SRAS curve to the left. 
C) A fall in the prices of nonlabor inputs will shift the SRAS curve to the left. 
D) An increase in labor productivity will shift the SRAS curve to the left. 
E) c and d 
A) A decrease in wage rates will shift the SRAS curve to the left. 
B) An adverse supply shock will shift the SRAS curve to the left. 
C) A fall in the prices of nonlabor inputs will shift the SRAS curve to the left. 
D) An increase in labor productivity will shift the SRAS curve to the left. 
E) c and d

Question 9

Which of the following statements is false?

Accepted Answer

A) If the SRAS curve shifts rightward,the price level falls in the short run. 
B) If AD rises and SRAS is constant,the price level rises in the short run. 
C) If both SRAS and AD decline,Real GDP falls in the short run. 
D) If both SRAS and AD increase,the price level necessarily rises in the short run. 
E) none of the above 
A) If the SRAS curve shifts rightward,the price level falls in the short run. 
B) If AD rises and SRAS is constant,the price level rises in the short run. 
C) If both SRAS and AD decline,Real GDP falls in the short run. 
D) If both SRAS and AD increase,the price level necessarily rises in the short run. 
E) none of the above

Question 10

Which of the following factors can shift the AD curve?

Accepted Answer

A) net exports 
B) government purchases 
C) the money supply 
D) b and c 
E) a,b,and c 
A) net exports 
B) government purchases 
C) the money supply 
D) b and c 
E) a,b,and c

Question 11

Which of the following statements represents a correct and sequentially accurate economic explanation?

Accepted Answer

A) Business taxes rise,investment falls,total expenditures on goods and services falls,AD rises,and the AD curve shifts rightward. 
B) The dollar depreciates,net exports rise,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward. 
C) The interest rate falls,consumption rises,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward. 
D) b and c 
E) a,b,and c 
A) Business taxes rise,investment falls,total expenditures on goods and services falls,AD rises,and the AD curve shifts rightward. 
B) The dollar depreciates,net exports rise,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward. 
C) The interest rate falls,consumption rises,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward. 
D) b and c 
E) a,b,and c

Question 12

A change in the money supply can affect one or more of the components of spending and therefore shift the short-run aggregate supply (SRAS)curve.

Accepted Answer

A) True 
 B)False

Question 13

A decrease in the price of a nonlabor input such as machinery

Accepted Answer

A) shifts the SRAS curve to the right. 
B) shifts the SRAS curve to the left. 
C) causes an upward movement along the existing SRAS curve. 
D) causes a downward movement along the existing SRAS curve. 
E) none of the above 
A) shifts the SRAS curve to the right. 
B) shifts the SRAS curve to the left. 
C) causes an upward movement along the existing SRAS curve. 
D) causes a downward movement along the existing SRAS curve. 
E) none of the above

Question 14

Which set of changes is definitely predicted to lower Real GDP in the short run?

Accepted Answer

A) The money supply rises and labor productivity rises. 
B) The U.S.dollar depreciates and wage rates fall. 
C) The U.S.dollar appreciates and labor productivity rises. 
D) Foreign real national income falls and wage rates rise. 
E) none of the above 
A) The money supply rises and labor productivity rises. 
B) The U.S.dollar depreciates and wage rates fall. 
C) The U.S.dollar appreciates and labor productivity rises. 
D) Foreign real national income falls and wage rates rise. 
E) none of the above

Question 15

The interest rate effect,the real balance effect,and the international trade effect all begin with a change in the price level.

Accepted Answer

A) True 
 B)False

Question 16

A change in labor productivity shifts the __________ curve and a change in the exchange rate shifts the __________ curve.

Accepted Answer

A) SRAS;SRAS 
B) AD;AD 
C) SRAS;AD 
D) AD;SRAS 
E) none of the above 
A) SRAS;SRAS 
B) AD;AD 
C) SRAS;AD 
D) AD;SRAS 
E) none of the above

Question 17

Wage rates fall.This increases __________ and the __________ curve shifts rightward.

Accepted Answer

A) aggregate demand (A
D) ;AD 
B) short-run aggregate supply (SRAS);AD 
C) short-run aggregate supply (SRAS);SRAS 
D) employment;AD 
E) none of the above 
A) aggregate demand (A
D) ;AD 
B) short-run aggregate supply (SRAS);AD 
C) short-run aggregate supply (SRAS);SRAS 
D) employment;AD 
E) none of the above

Question 18

Aggregate demand refers to the

Accepted Answer

A) quantity demanded of all goods and services at various price levels,ceteris paribus. 
B) quantity demanded of all goods and services at a particular price level,ceteris paribus. 
C) quantity demanded of Real GDP at various price levels,ceteris paribus. 
D) various amounts of GDP that are demanded at various price levels,ceteris paribus. 
E) a and c 
A) quantity demanded of all goods and services at various price levels,ceteris paribus. 
B) quantity demanded of all goods and services at a particular price level,ceteris paribus. 
C) quantity demanded of Real GDP at various price levels,ceteris paribus. 
D) various amounts of GDP that are demanded at various price levels,ceteris paribus. 
E) a and c

Question 19

An increase in investment caused by a factor other than a change in the price level

Accepted Answer

A) shifts the AD curve to the right. 
B) shifts the AD curve to the left. 
C) causes an upward movement along the existing AD curve. 
D) causes a downward movement along the existing AD curve. 
E) none of the above 
A) shifts the AD curve to the right. 
B) shifts the AD curve to the left. 
C) causes an upward movement along the existing AD curve. 
D) causes a downward movement along the existing AD curve. 
E) none of the above

Question 20

Suppose the price level is rising and it is widely forecast to rise even further.This forecast might cause __________ of some consumption plans,resulting in __________ the AD curve.

Accepted Answer

A) postponement;a rightward shift of 
B) postponement;a leftward shift of 
C) acceleration;a rightward shift of 
D) acceleration;movement down along 
A) postponement;a rightward shift of 
B) postponement;a leftward shift of 
C) acceleration;a rightward shift of 
D) acceleration;movement down along

Exam 8: Aggregate Demand and Aggregate Supply

When the dollar appreciates,U.S.net exports fall and aggregate demand decreases.

In a two-country world,an increase in foreign input prices,ceteris paribus,

A change in Real GDP in the short run can be brought about by a change in

Which set of changes is definitely predicted to raise Real GDP in the short run?

An increase in the money supply may __________ total expenditures,leading to a __________ shift of the AD curve.

If businesses buy fewer capital goods,and nothing else changes,then total expenditures on U.S.goods and services will decrease.And if total expenditures decrease,then __________ will decrease;consequently,the __________ curve will shift __________.

The real balance effect is the change in

Which of the following statements is true?

Which of the following statements is false?

Which of the following factors can shift the AD curve?

Which of the following statements represents a correct and sequentially accurate economic explanation?

A change in the money supply can affect one or more of the components of spending and therefore shift the short-run aggregate supply (SRAS)curve.

A decrease in the price of a nonlabor input such as machinery

Which set of changes is definitely predicted to lower Real GDP in the short run?

The interest rate effect,the real balance effect,and the international trade effect all begin with a change in the price level.

A change in labor productivity shifts the __________ curve and a change in the exchange rate shifts the __________ curve.

Wage rates fall.This increases __________ and the __________ curve shifts rightward.

Aggregate demand refers to the

An increase in investment caused by a factor other than a change in the price level

Suppose the price level is rising and it is widely forecast to rise even further.This forecast might cause __________ of some consumption plans,resulting in __________ the AD curve.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

An increase in the money supply may total expenditures,leading to a shift of the AD curve.

If businesses buy fewer capital goods,and nothing else changes,then total expenditures on U.S.goods and services will decrease.And if total expenditures decrease,then will decrease;consequently,the curve will shift __.

A change in labor productivity shifts the curve and a change in the exchange rate shifts the curve.

Wage rates fall.This increases and the curve shifts rightward.

Suppose the price level is rising and it is widely forecast to rise even further.This forecast might cause of some consumption plans,resulting in the AD curve.