Question 1

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

Accepted Answer

A) new Keynesianism; the new classical model 
B) the real business cycle model; Marxism 
C) rational expectations; monetarism 
D) the monetarist model; the Keynesian model 
A) new Keynesianism; the new classical model 
B) the real business cycle model; Marxism 
C) rational expectations; monetarism 
D) the monetarist model; the Keynesian model

Question 2

The international trade effect states that a(n)________ in the price level will ________ net exports.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; not affect 
A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; not affect

Question 3

Because of the slope of the aggregate demand curve,we can say that

Accepted Answer

A) a decrease in the price level leads to a lower level of real GDP demanded. 
B) an increase in the price level leads to no change in the level of real GDP demanded. 
C) a decrease in the price level leads to a higher level of real GDP demanded. 
D) an increase in the price level leads to a higher level of real GDP demanded. 
A) a decrease in the price level leads to a lower level of real GDP demanded. 
B) an increase in the price level leads to no change in the level of real GDP demanded. 
C) a decrease in the price level leads to a higher level of real GDP demanded. 
D) an increase in the price level leads to a higher level of real GDP demanded.

Question 4

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S.aggregate demand.

Accepted Answer

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

Question 5

The level of aggregate supply in the long run is not affected by

Accepted Answer

A) changes in technology. 
B) changes in the capital stock. 
C) changes in the price level. 
D) changes in the number of workers. 
A) changes in technology. 
B) changes in the capital stock. 
C) changes in the price level. 
D) changes in the number of workers.

Question 6

The new classical model has as its central idea that

Accepted Answer

A) wage and price stickiness explains fluctuations in real GDP. 
B) workers and firms have rational expectations. 
C) the Federal Reserve should adopt a monetary growth rule. 
D) shifts in aggregate demand have no impact on real GDP. 
A) wage and price stickiness explains fluctuations in real GDP. 
B) workers and firms have rational expectations. 
C) the Federal Reserve should adopt a monetary growth rule. 
D) shifts in aggregate demand have no impact on real GDP.

Question 7

If workers and firms have rational expectations,they form their expectations using

Accepted Answer

A) all the information available to them. 
B) only information from the past. 
C) only information provided to them by the government. 
D) only information gathered from random sources. 
A) all the information available to them. 
B) only information from the past. 
C) only information provided to them by the government. 
D) only information gathered from random sources.

Question 8

Stagflation is often a result of

Accepted Answer

A) a negative supply shock. 
B) a decrease in aggregate demand. 
C) an increase in aggregate demand. 
D) an increase in aggregate supply. 
A) a negative supply shock. 
B) a decrease in aggregate demand. 
C) an increase in aggregate demand. 
D) an increase in aggregate supply.

Question 9

Figure 13-3  
-Refer to Figure 13-3.Suppose the economy is at point A.If the economy experiences a supply shock,where will the eventual short-run equilibrium be?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 10

Figure 13-2  
-Refer to Figure 13-2.Ceteris paribus,an increase in the labor force would be represented by a movement from

Accepted Answer

A) SRAS1 to SRAS2. 
B) SRAS2 to SRAS1. 
C) point A to point B. 
D) point B to point A. 
A) SRAS1 to SRAS2. 
B) SRAS2 to SRAS1. 
C) point A to point B. 
D) point B to point A.

Question 11

In the dynamic aggregated demand and aggregate supply model,inflation occurs if

Accepted Answer

A) AD shifts faster than SRAS. 
B) AD shifts slower than SRAS. 
C) SRAS shifts faster than AD. 
D) LRAS shifts faster than AD. 
A) AD shifts faster than SRAS. 
B) AD shifts slower than SRAS. 
C) SRAS shifts faster than AD. 
D) LRAS shifts faster than AD.

Question 12

The level of real GDP in the long run is called

Accepted Answer

A) potential GDP. 
B) short-run GDP. 
C) frictional GDP. 
D) low-capacity GDP. 
A) potential GDP. 
B) short-run GDP. 
C) frictional GDP. 
D) low-capacity GDP.

Question 13

When people became ________ concerned with the underlying value of their houses and became ________ with the expectations of the prices of their houses increasing,a housing bubble occurred.

Accepted Answer

A) less; less 
B) less; more 
C) more; less 
D) more; more 
A) less; less 
B) less; more 
C) more; less 
D) more; more

Question 14

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Accepted Answer

@#IMG-DLM& The economy is at point A with the pric

Question 15

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

Accepted Answer

A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B) Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C) Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D) Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices. 
A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. 
B) Workers and firms adjust their expectations of wages and prices downward and they push for higher wages and prices. 
C) Workers and firms adjust their expectations of wages and prices upward and they push for higher wages and prices. 
D) Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and prices.

Question 16

Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve.

Accepted Answer

A) equals; intersect at a point to the right of 
B) equals; intersect at a point on 
C) is greater than; intersect at a point to the left of 
D) is less than; intersect at a point to the right of 
A) equals; intersect at a point to the right of 
B) equals; intersect at a point on 
C) is greater than; intersect at a point to the left of 
D) is less than; intersect at a point to the right of

Question 17

During 2008,oil price increases

Accepted Answer

A) shifted the short-run aggregate supply curve farther to the left than similar increases had 30 years earlier. 
B) shifted the aggregate demand curve farther to the right than similar increases had 30 years earlier. 
C) did not shift the short-run aggregate supply curve as far to the left as similar increases had 30 years earlier. 
D) shifted the aggregate demand curve farther to the left than similar increases had 30 years earlier. 
A) shifted the short-run aggregate supply curve farther to the left than similar increases had 30 years earlier. 
B) shifted the aggregate demand curve farther to the right than similar increases had 30 years earlier. 
C) did not shift the short-run aggregate supply curve as far to the left as similar increases had 30 years earlier. 
D) shifted the aggregate demand curve farther to the left than similar increases had 30 years earlier.

Question 18

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment.Which of the following will happen in the short run?

Accepted Answer

A) Output will rise. 
B) Prices will rise. 
C) Unemployment will rise. 
D) The aggregate demand curve will shift to the right. 
A) Output will rise. 
B) Prices will rise. 
C) Unemployment will rise. 
D) The aggregate demand curve will shift to the right.

Question 19

Which aggregate supply curve has a positive slope?

Accepted Answer

A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run 
A) long run only 
B) short run only 
C) both long run and short run 
D) neither long run nor short run

Question 20

Why are the long-run effects of an increase in aggregate demand on price and output different from the short-run effects?

Accepted Answer

The long-run effects differ from the sho

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.

The international trade effect states that a(n) in the price level will net exports.

Because of the slope of the aggregate demand curve,we can say that

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will exports from the United States to Mexico and U.S.aggregate demand.

The level of aggregate supply in the long run is not affected by

The new classical model has as its central idea that

If workers and firms have rational expectations,they form their expectations using

Stagflation is often a result of

Figure 13-3 -Refer to Figure 13-3.Suppose the economy is at point A.If the economy experiences a supply shock,where will the eventual short-run equilibrium be?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the labor force would be represented by a movement from

In the dynamic aggregated demand and aggregate supply model,inflation occurs if

The level of real GDP in the long run is called

When people became concerned with the underlying value of their houses and became with the expectations of the prices of their houses increasing,a housing bubble occurred.

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

Long-run macroeconomic equilibrium occurs when aggregate demand short-run aggregate supply and they the long-run supply curve.

During 2008,oil price increases

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment.Which of the following will happen in the short run?

Which aggregate supply curve has a positive slope?

Why are the long-run effects of an increase in aggregate demand on price and output different from the short-run effects?

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 13: Aggregate Demand and Aggregate Supply Analysis

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

The international trade effect states that a(n)________ in the price level will ________ net exports.

Because of the slope of the aggregate demand curve,we can say that

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S.aggregate demand.

The level of aggregate supply in the long run is not affected by

The new classical model has as its central idea that

If workers and firms have rational expectations,they form their expectations using

Stagflation is often a result of

Figure 13-3 -Refer to Figure 13-3.Suppose the economy is at point A.If the economy experiences a supply shock,where will the eventual short-run equilibrium be?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,an increase in the labor force would be represented by a movement from

In the dynamic aggregated demand and aggregate supply model,inflation occurs if

The level of real GDP in the long run is called

When people became ________ concerned with the underlying value of their houses and became ________ with the expectations of the prices of their houses increasing,a housing bubble occurred.

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.

Why does the short-run aggregate supply curve shift to the left in the long run,following an increase in aggregate demand?

Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve.

During 2008,oil price increases

Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment.Which of the following will happen in the short run?

Which aggregate supply curve has a positive slope?

Why are the long-run effects of an increase in aggregate demand on price and output different from the short-run effects?

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.

The international trade effect states that a(n) in the price level will net exports.

Last week,13 Mexican pesos could purchase one U.S.dollar.This week,it takes 11 Mexican pesos to purchase one U.S.dollar.This change in the value of the dollar will exports from the United States to Mexico and U.S.aggregate demand.

When people became concerned with the underlying value of their houses and became with the expectations of the prices of their houses increasing,a housing bubble occurred.

Long-run macroeconomic equilibrium occurs when aggregate demand short-run aggregate supply and they the long-run supply curve.