Question 1

The short-run aggregate supply function plots

Accepted Answer

A) planned expenditures against the price level. 
B) total employment against the price level. 
C) planned production against the price level. 
D) real GDP against planned production. 
A) planned expenditures against the price level. 
B) total employment against the price level. 
C) planned production against the price level. 
D) real GDP against planned production.

Question 2

Figure 8-3  
-Which point or points on Figure 8-3 illustrate a short-run equilibrium?

Accepted Answer

A) Point A 
B) Point B 
C) Point C 
D) Points A and C 
A) Point A 
B) Point B 
C) Point C 
D) Points A and C

Question 3

The short-run aggregate supply function plots ________ against the price level.

Accepted Answer

A) planned expenditures 
B) total employment 
C) planned production 
D) real GDP 
A) planned expenditures 
B) total employment 
C) planned production 
D) real GDP

Question 4

An unexpected event that causes the aggregate demand curve to shift inward or outward is an

Accepted Answer

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

Question 5

Figure 8-2  
-In Figure 8-2,assume that A is the current long-run aggregate supply curve and that E is the current short-run aggregate supply curve.If there were a discovery of large oil fields in Manitoba,where no one thought oil fields existed,then we could expect the long-run aggregate supply curve and the short-run aggregate supply curve to

Accepted Answer

A) remain B and E. 
B) move to A and D. 
C) move to B and F. 
D) move to A and F. 
A) remain B and E. 
B) move to A and D. 
C) move to B and F. 
D) move to A and F.

Question 6

If there are continual decreases in aggregate supply,the economy will experience

Accepted Answer

A) a slow decrease in price levels. 
B) demand-pull inflation. 
C) an expansionary gap. 
D) cost-push inflation. 
A) a slow decrease in price levels. 
B) demand-pull inflation. 
C) an expansionary gap. 
D) cost-push inflation.

Question 7

Explain what is meant by cost-push inflation?

Accepted Answer

Cost-push inflation results when the SRA

Question 8

The ________ function plots planned production against the price level.

Accepted Answer

A) planned expenditures 
B) total employment 
C) short-run aggregate supply 
D) real GDP 
A) planned expenditures 
B) total employment 
C) short-run aggregate supply 
D) real GDP

Question 9

Derive the SRAS and explain fully.Once done,discuss the short-run and long-run equilibrium positions along with the difference between Aggregate Supply and Individual Supply.

Accepted Answer

A complete discussio

Question 10

If the price level kept decreasing,the short-run aggregate supply curve would get ________ because we could hire any and all resources at the going rate without increasing prices or the price of inputs.

Accepted Answer

A) steeper 
B) flatter 
C) indefinite 
D) vertical 
A) steeper 
B) flatter 
C) indefinite 
D) vertical

Question 11

Economic growth will not result in inflation if ________ shifts outward to the right at the same speed as aggregate supply.

Accepted Answer

A) aggregate demand 
B) aggregate supply 
C) labour supply 
D) the planned aggregate expenditure curve 
A) aggregate demand 
B) aggregate supply 
C) labour supply 
D) the planned aggregate expenditure curve

Question 12

A ________ occurs at the intersection of the short-run aggregate supply curve and the aggregate demand curve.

Accepted Answer

A) long run equilibrium 
B) short run equilibrium 
C) adverse equilibrium 
D) price adjustment 
A) long run equilibrium 
B) short run equilibrium 
C) adverse equilibrium 
D) price adjustment

Question 13

Figure 8-1  
-According to Figure 8-1,an increase in aggregate demand beyond real GDP level Q₁ will result in

Accepted Answer

A) higher unemployment and excess productive capacity. 
B) higher output,but not higher prices. 
C) higher prices,but no change in output. 
D) falling prices and increases in output. 
A) higher unemployment and excess productive capacity. 
B) higher output,but not higher prices. 
C) higher prices,but no change in output. 
D) falling prices and increases in output.

Question 14

Economic growth will be associated with a constant price level when

Accepted Answer

A) the increase in aggregate demand exactly equals the increase in long-run aggregate supply. 
B) the increase in aggregate demand is more than the increase in long-run aggregate supply. 
C) the increase in aggregate demand is less than the increase in long-run aggregate supply. 
D) the increase in aggregate demand is accompanied by a reduction in short-run aggregate supply. 
A) the increase in aggregate demand exactly equals the increase in long-run aggregate supply. 
B) the increase in aggregate demand is more than the increase in long-run aggregate supply. 
C) the increase in aggregate demand is less than the increase in long-run aggregate supply. 
D) the increase in aggregate demand is accompanied by a reduction in short-run aggregate supply.

Question 15

Figure 8-4  
-In Figure 8-4,the economy would most likely move from A D₁ to A D₂ because of

Accepted Answer

A) a supply shock. 
B) a demand shock. 
C) a recession. 
D) a depression. 
A) a supply shock. 
B) a demand shock. 
C) a recession. 
D) a depression.

Question 16

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

Accepted Answer

A) cost-push inflation. 
B) monetary stagflation. 
C) demand-pull inflation. 
D) aggregate supply shock. 
A) cost-push inflation. 
B) monetary stagflation. 
C) demand-pull inflation. 
D) aggregate supply shock.

Question 17

The ________ between the short-run aggregate supply function and the price level suggests that,in the short run,firms produce more output as the price levels rises.

Accepted Answer

A) negative relationship 
B) positive relationship 
C) inverse relationship 
D) demand relationship 
A) negative relationship 
B) positive relationship 
C) inverse relationship 
D) demand relationship

Question 18

Figure 8-1  
-According to Figure 8-1,________ in aggregate demand between real GDP levels Q₀ and Q₁ would most likely result in some inflation.

Accepted Answer

A) an increase 
B) a decrease 
C) a lateral movement 
D) movement 
A) an increase 
B) a decrease 
C) a lateral movement 
D) movement

Question 19

As the ________ decreases,the short-run aggregate supply curve begins to level out.

Accepted Answer

A) inflation rate 
B) price level 
C) unemployment rate 
D) labour force participation rate 
A) inflation rate 
B) price level 
C) unemployment rate 
D) labour force participation rate

Question 20

A long run equilibrium occurs at the intersection of the short-run aggregate supply curve and the

Accepted Answer

A) long-run aggregate investment curve. 
B) aggregate demand curve. 
C) planned aggregate expenditure curve. 
D) investment demand curve 
A) long-run aggregate investment curve. 
B) aggregate demand curve. 
C) planned aggregate expenditure curve. 
D) investment demand curve

The short-run aggregate supply function plots

Figure 8-3 -Which point or points on Figure 8-3 illustrate a short-run equilibrium?

The short-run aggregate supply function plots ________ against the price level.

An unexpected event that causes the aggregate demand curve to shift inward or outward is an

If there are continual decreases in aggregate supply,the economy will experience

Explain what is meant by cost-push inflation?

The ________ function plots planned production against the price level.

Derive the SRAS and explain fully.Once done,discuss the short-run and long-run equilibrium positions along with the difference between Aggregate Supply and Individual Supply.

If the price level kept decreasing,the short-run aggregate supply curve would get ________ because we could hire any and all resources at the going rate without increasing prices or the price of inputs.

Economic growth will not result in inflation if ________ shifts outward to the right at the same speed as aggregate supply.

A ________ occurs at the intersection of the short-run aggregate supply curve and the aggregate demand curve.

Figure 8-1 -According to Figure 8-1,an increase in aggregate demand beyond real GDP level Q₁ will result in

Economic growth will be associated with a constant price level when

Figure 8-4 -In Figure 8-4,the economy would most likely move from A D₁ to A D₂ because of

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

The ________ between the short-run aggregate supply function and the price level suggests that,in the short run,firms produce more output as the price levels rises.

Figure 8-1 -According to Figure 8-1,________ in aggregate demand between real GDP levels Q₀ and Q₁ would most likely result in some inflation.

As the ________ decreases,the short-run aggregate supply curve begins to level out.

A long run equilibrium occurs at the intersection of the short-run aggregate supply curve and the

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 8: Modelling Real Gdp and the Price Level in the Short Run

The short-run aggregate supply function plots

Figure 8-3 -Which point or points on Figure 8-3 illustrate a short-run equilibrium?

The short-run aggregate supply function plots ________ against the price level.

An unexpected event that causes the aggregate demand curve to shift inward or outward is an

If there are continual decreases in aggregate supply,the economy will experience

Explain what is meant by cost-push inflation?

The ________ function plots planned production against the price level.

Derive the SRAS and explain fully.Once done,discuss the short-run and long-run equilibrium positions along with the difference between Aggregate Supply and Individual Supply.

If the price level kept decreasing,the short-run aggregate supply curve would get ________ because we could hire any and all resources at the going rate without increasing prices or the price of inputs.

Economic growth will not result in inflation if ________ shifts outward to the right at the same speed as aggregate supply.

A ________ occurs at the intersection of the short-run aggregate supply curve and the aggregate demand curve.

Figure 8-1 -According to Figure 8-1,an increase in aggregate demand beyond real GDP level Q₁ will result in

Economic growth will be associated with a constant price level when

Figure 8-4 -In Figure 8-4,the economy would most likely move from A D₁ to A D₂ because of

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

The ________ between the short-run aggregate supply function and the price level suggests that,in the short run,firms produce more output as the price levels rises.

Figure 8-1 -According to Figure 8-1,________ in aggregate demand between real GDP levels Q₀ and Q₁ would most likely result in some inflation.

As the ________ decreases,the short-run aggregate supply curve begins to level out.

A long run equilibrium occurs at the intersection of the short-run aggregate supply curve and the

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters