Question 1

Which is NOT consistent with the level of output in the long run?

Accepted Answer

A)  the natural rate of output 
B)  full capacity output level 
C)  high inflation 
D)  the natural rate of unemployment 
A)  the natural rate of output 
B)  full capacity output level 
C)  high inflation 
D)  the natural rate of unemployment

Question 2

Describe the determinants of short-run aggregate supply and their effects on the short-run aggregate supply curve.Support your response with a graph.

Accepted Answer

The determinants of aggregate supply inc

Question 3

The Great Depression showed that the short-run aggregate supply and the aggregate demand curves:

Accepted Answer

A)  must always intersect at full employment. 
B)  can intersect at output levels far below full employment. 
C)  must intersect at output levels above full employment. 
D)  can never lead to deflation. 
A)  must always intersect at full employment. 
B)  can intersect at output levels far below full employment. 
C)  must intersect at output levels above full employment. 
D)  can never lead to deflation.

Question 4

Cost-push inflation is a situation in which:

Accepted Answer

A)  the short-run aggregate supply curve shifts rightward. 
B)  the aggregate demand curve shifts rightward. 
C)  the short-run aggregate supply curve shifts leftward. 
D)  the aggregate demand curve shifts leftward. 
A)  the short-run aggregate supply curve shifts rightward. 
B)  the aggregate demand curve shifts rightward. 
C)  the short-run aggregate supply curve shifts leftward. 
D)  the aggregate demand curve shifts leftward.

Question 5

Other things equal,when the U.S.aggregate price level falls,U.S.exports _______ and U.S.imports ________.

Accepted Answer

A)  fall;rise 
B)  fall;fall 
C)  rise;fall 
D)  rise;rise 
A)  fall;rise 
B)  fall;fall 
C)  rise;fall 
D)  rise;rise

Question 6

The long-run aggregate supply curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 7

_____ occurs when a negative supply shock hits the economy,shifting the short-run aggregate supply curve leftward.

Accepted Answer

A)  Demand-pull inflation 
B)  Demand-push inflation 
C)  Cost-push inflation 
D)  Cost-pull inflation 
A)  Demand-pull inflation 
B)  Demand-push inflation 
C)  Cost-push inflation 
D)  Cost-pull inflation

Question 8

Rising confidence in the economy shifts the aggregate demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 9

Factors that can shift the entire aggregate demand curve are called determinants of aggregate demand.

Accepted Answer

A) True 
 B)False

Question 10

If firms believe that the business climate is improving,then the short-run aggregate supply will shift to the right.

Accepted Answer

A) True 
 B)False

Question 11

Show graphically the difference between a movement along a short-run aggregate supply curve and a shift to a new curve.Explain what causes each.

Accepted Answer

The aggregate supply curve is positively

Question 12

The aggregate demand curve has the price level on the vertical axis and output on the horizontal axis.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions 
Figure: Determining SRAS Shifts  
-(Figure: Determining SRAS Shifts)Which statement is NOT correct?

Accepted Answer

A)  Equilibrium output is $3,000 worth of goods and services. 
B)  An increase in aggregate demand would lead to deflation. 
C)  Full employment occurs when the economy produces $3,000 worth of goods and services. 
D)  In the short-run equilibrium,output can be greater than or less than $3,000. 
A)  Equilibrium output is $3,000 worth of goods and services. 
B)  An increase in aggregate demand would lead to deflation. 
C)  Full employment occurs when the economy produces $3,000 worth of goods and services. 
D)  In the short-run equilibrium,output can be greater than or less than $3,000.

Question 14

During demand-pull inflation,the economy cannot expand beyond full employment.

Accepted Answer

A) True 
 B)False

Question 15

Describe cost-push inflation if the economy begins in long-run equilibrium at full employment.Include a graph to support your response.

Accepted Answer

We assume that the economy is initially

Question 16

A(n)__________ in government spending,a __________ domestic currency,and ________ interest rates will shift a country's aggregate demand to the left.

Accepted Answer

A)  decrease;stronger;higher 
B)  increase;weaker;higher 
C)  increase;stronger;lower 
D)  decrease;weaker;lower 
A)  decrease;stronger;higher 
B)  increase;weaker;higher 
C)  increase;stronger;lower 
D)  decrease;weaker;lower

Question 17

If both consumers and businesses are pessimistic about the future of the economy:

Accepted Answer

A)  there is a movement up along the aggregate demand curve. 
B)  the aggregate demand curve shifts to the left. 
C)  there is a movement down along the aggregate demand curve. 
D)  the aggregate demand curve shifts to the right. 
A)  there is a movement up along the aggregate demand curve. 
B)  the aggregate demand curve shifts to the left. 
C)  there is a movement down along the aggregate demand curve. 
D)  the aggregate demand curve shifts to the right.

Question 18

If a pill is discovered that allows people to work twice as fast as they would ordinarily work,then the aggregate supply curve will:

Accepted Answer

A)  shift to the left. 
B)  shift to the right. 
C)  not change. 
D)  become vertical. 
A)  shift to the left. 
B)  shift to the right. 
C)  not change. 
D)  become vertical.

Question 19

Consumer spending is NOT affected by:

Accepted Answer

A)  wealth. 
B)  consumer confidence. 
C)  taxes. 
D)  inventories. 
A)  wealth. 
B)  consumer confidence. 
C)  taxes. 
D)  inventories.

Question 20

When home values collapsed in the period that began in 2008,it reduced many Americans':

Accepted Answer

A)  bank balances. 
B)  household wealth. 
C)  household income. 
D)  retirement accounts. 
A)  bank balances. 
B)  household wealth. 
C)  household income. 
D)  retirement accounts.

Which is NOT consistent with the level of output in the long run?

Describe the determinants of short-run aggregate supply and their effects on the short-run aggregate supply curve.Support your response with a graph.

The Great Depression showed that the short-run aggregate supply and the aggregate demand curves:

Cost-push inflation is a situation in which:

Other things equal,when the U.S.aggregate price level falls,U.S.exports _ and U.S.imports __.

The long-run aggregate supply curve is horizontal.

_____ occurs when a negative supply shock hits the economy,shifting the short-run aggregate supply curve leftward.

Rising confidence in the economy shifts the aggregate demand curve to the left.

Factors that can shift the entire aggregate demand curve are called determinants of aggregate demand.

If firms believe that the business climate is improving,then the short-run aggregate supply will shift to the right.

Show graphically the difference between a movement along a short-run aggregate supply curve and a shift to a new curve.Explain what causes each.

The aggregate demand curve has the price level on the vertical axis and output on the horizontal axis.

Use the following to answer questions Figure: Determining SRAS Shifts -(Figure: Determining SRAS Shifts)Which statement is NOT correct?

During demand-pull inflation,the economy cannot expand beyond full employment.

Describe cost-push inflation if the economy begins in long-run equilibrium at full employment.Include a graph to support your response.

A(n) in government spending,a domestic currency,and interest rates will shift a country's aggregate demand to the left.

If both consumers and businesses are pessimistic about the future of the economy:

If a pill is discovered that allows people to work twice as fast as they would ordinarily work,then the aggregate supply curve will:

Consumer spending is NOT affected by:

When home values collapsed in the period that began in 2008,it reduced many Americans':

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters

Exam 9: Aggregate Demand and Supply

Which is NOT consistent with the level of output in the long run?

Describe the determinants of short-run aggregate supply and their effects on the short-run aggregate supply curve.Support your response with a graph.

The Great Depression showed that the short-run aggregate supply and the aggregate demand curves:

Cost-push inflation is a situation in which:

Other things equal,when the U.S.aggregate price level falls,U.S.exports _______ and U.S.imports ________.

The long-run aggregate supply curve is horizontal.

_____ occurs when a negative supply shock hits the economy,shifting the short-run aggregate supply curve leftward.

Rising confidence in the economy shifts the aggregate demand curve to the left.

Factors that can shift the entire aggregate demand curve are called determinants of aggregate demand.

If firms believe that the business climate is improving,then the short-run aggregate supply will shift to the right.

Show graphically the difference between a movement along a short-run aggregate supply curve and a shift to a new curve.Explain what causes each.

The aggregate demand curve has the price level on the vertical axis and output on the horizontal axis.

Use the following to answer questions Figure: Determining SRAS Shifts -(Figure: Determining SRAS Shifts)Which statement is NOT correct?

During demand-pull inflation,the economy cannot expand beyond full employment.

Describe cost-push inflation if the economy begins in long-run equilibrium at full employment.Include a graph to support your response.

A(n)__________ in government spending,a __________ domestic currency,and ________ interest rates will shift a country's aggregate demand to the left.

If both consumers and businesses are pessimistic about the future of the economy:

If a pill is discovered that allows people to work twice as fast as they would ordinarily work,then the aggregate supply curve will:

Consumer spending is NOT affected by:

When home values collapsed in the period that began in 2008,it reduced many Americans':

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomic

Filters

Other things equal,when the U.S.aggregate price level falls,U.S.exports _ and U.S.imports __.

A(n) in government spending,a domestic currency,and interest rates will shift a country's aggregate demand to the left.