Question 1

Which of the following will shift the short-run aggregate supply curve to the left?

Accepted Answer

A)  an increase in the minimum wage 
B)  a decrease in immigration from abroad 
C)  a decrease in the price of oil 
D)  a decrease in the actual price level 
A)  an increase in the minimum wage 
B)  a decrease in immigration from abroad 
C)  a decrease in the price of oil 
D)  a decrease in the actual price level

Question 2

(Figure: Determining Aggregate Equilibrium Levels)   Equilibrium output is ________ and the equilibrium price level is ________.

Accepted Answer

A)  2,000;130 
B)  5,000;160 
C)  3,000;100 
D)  100;3,000 
A)  2,000;130 
B)  5,000;160 
C)  3,000;100 
D)  100;3,000

Question 3

Which of the following would NOT affect (shift)the short-run aggregate supply curve?

Accepted Answer

A)  an increase in labor productivity 
B)  a decline in the price of imported oil 
C)  a decline in business taxes 
D)  an increase in the price level 
A)  an increase in labor productivity 
B)  a decline in the price of imported oil 
C)  a decline in business taxes 
D)  an increase in the price level

Question 4

A change in _____ will cause a change in the quantity demanded of real GDP.

Accepted Answer

A)  consumer spending 
B)  investment 
C)  the price level 
D)  imports 
A)  consumer spending 
B)  investment 
C)  the price level 
D)  imports

Question 5

The short-run aggregate supply curve:

Accepted Answer

A)  is downward sloping. 
B)  shows many input costs quickly changing to keep the economy at full employment. 
C)  exhibits a positive relationship between the aggregate price level and aggregate output. 
D)  shows input costs remaining constant,as firms have a lot of excess capacity. 
A)  is downward sloping. 
B)  shows many input costs quickly changing to keep the economy at full employment. 
C)  exhibits a positive relationship between the aggregate price level and aggregate output. 
D)  shows input costs remaining constant,as firms have a lot of excess capacity.

Question 6

Aggregate supply shifts to the left when:

Accepted Answer

A)  input prices rise. 
B)  subsidies are higher. 
C)  inflation expectations are lower. 
D)  there is a decrease in burdensome regulations. 
A)  input prices rise. 
B)  subsidies are higher. 
C)  inflation expectations are lower. 
D)  there is a decrease in burdensome regulations.

Question 7

A solution to the simultaneous emergence of deflation and unemployment is to use policies that shift the:

Accepted Answer

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

Question 8

Increased productivity causes the aggregate supply curve to shift to the left.

Accepted Answer

A) True 
 B)False

Question 9

(Figure: Aggregate Demand Shift)   The shift in aggregate demand depicted may be due to a(n):

Accepted Answer

A)  increase in consumer confidence. 
B)  decrease in interest rates. 
C)  increase in income taxes. 
D)  increase in exports. 
A)  increase in consumer confidence. 
B)  decrease in interest rates. 
C)  increase in income taxes. 
D)  increase in exports.

Question 10

Show graphically the difference between a movement along an aggregate demand curve and a shift to a new aggregate demand curve.Explain what causes each.

Accepted Answer

The aggregate demand curve is negatively

Question 11

A rising aggregate price level _______ an economy's interest rates and therefore _____ output demanded.

Accepted Answer

A)  increases;increases 
B)  increases;reduces 
C)  reduces;increases 
D)  reduces;reduces 
A)  increases;increases 
B)  increases;reduces 
C)  reduces;increases 
D)  reduces;reduces

Question 12

When interest rates drop,investment will increase and the aggregate demand curve will shift to the right.

Accepted Answer

A) True 
 B)False

Question 13

The 1973 oil shocks created:

Accepted Answer

A)  demand-pull inflation. 
B)  cost-push inflation. 
C)  a shift to the right of the aggregate supply curve. 
D)  a shift to the right of the aggregate demand curve. 
A)  demand-pull inflation. 
B)  cost-push inflation. 
C)  a shift to the right of the aggregate supply curve. 
D)  a shift to the right of the aggregate demand curve.

Question 14

Short-run macroeconomic equilibrium cannot be achieved when:

Accepted Answer

A)  inflation rates are low. 
B)  the short-run aggregate supply and aggregate demand curves intersect. 
C)  the quantity of short-run aggregate supply exceeds the quantity of aggregate demand. 
D)  inflation rates are high. 
A)  inflation rates are low. 
B)  the short-run aggregate supply and aggregate demand curves intersect. 
C)  the quantity of short-run aggregate supply exceeds the quantity of aggregate demand. 
D)  inflation rates are high.

Question 15

High taxes and/or heavy regulation:

Accepted Answer

A)  can cause firms to boost production so they can cover the added costs. 
B)  raise costs of production so that the aggregate supply curve shifts to the left. 
C)  are not likely to affect firms' behavior,since they are more concerned about profit than taxes or regulation . 
D)  are likely to shift aggregate supply to the right. 
A)  can cause firms to boost production so they can cover the added costs. 
B)  raise costs of production so that the aggregate supply curve shifts to the left. 
C)  are not likely to affect firms' behavior,since they are more concerned about profit than taxes or regulation . 
D)  are likely to shift aggregate supply to the right.

Question 16

The long-run aggregate supply curve represents the full-employment capacity of the economy.

Accepted Answer

A) True 
 B)False

Question 17

The Great Depression was characterized by a lack of aggregate demand.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements regarding the short-run aggregate supply curve is TRUE?

Accepted Answer

A)  The short-run aggregate supply curve shifts to the left when tax rates on businesses are lowered. 
B)  The short-run aggregate supply curve shifts to the right when the costs of capital rise. 
C)  The short-run aggregate supply curve shifts to the left when business expectations become more positive. 
D)  The short-run aggregate supply curve shifts to the right with a reduction in burdensome regulations. 
A)  The short-run aggregate supply curve shifts to the left when tax rates on businesses are lowered. 
B)  The short-run aggregate supply curve shifts to the right when the costs of capital rise. 
C)  The short-run aggregate supply curve shifts to the left when business expectations become more positive. 
D)  The short-run aggregate supply curve shifts to the right with a reduction in burdensome regulations.

Question 19

The aggregate demand curve shows the relationship between nominal GDP and the price level.

Accepted Answer

A) True 
 B)False

Question 20

If the marginal propensity to consume is 0.8,then $80 of every additional $100 of income will be spent on consumption.

Accepted Answer

A) True 
 B)False

Which of the following will shift the short-run aggregate supply curve to the left?

(Figure: Determining Aggregate Equilibrium Levels) Equilibrium output is and the equilibrium price level is .

Which of the following would NOT affect (shift)the short-run aggregate supply curve?

A change in _____ will cause a change in the quantity demanded of real GDP.

The short-run aggregate supply curve:

Aggregate supply shifts to the left when:

A solution to the simultaneous emergence of deflation and unemployment is to use policies that shift the:

Increased productivity causes the aggregate supply curve to shift to the left.

(Figure: Aggregate Demand Shift) The shift in aggregate demand depicted may be due to a(n):

Show graphically the difference between a movement along an aggregate demand curve and a shift to a new aggregate demand curve.Explain what causes each.

A rising aggregate price level ___ an economy's interest rates and therefore _ output demanded.

When interest rates drop,investment will increase and the aggregate demand curve will shift to the right.

The 1973 oil shocks created:

Short-run macroeconomic equilibrium cannot be achieved when:

High taxes and/or heavy regulation:

The long-run aggregate supply curve represents the full-employment capacity of the economy.

The Great Depression was characterized by a lack of aggregate demand.

Which of the following statements regarding the short-run aggregate supply curve is TRUE?

The aggregate demand curve shows the relationship between nominal GDP and the price level.

If the marginal propensity to consume is 0.8,then $80 of every additional $100 of income will be spent on consumption.

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 of the following will shift the short-run aggregate supply curve to the left?

(Figure: Determining Aggregate Equilibrium Levels) Equilibrium output is ________ and the equilibrium price level is ________.

Which of the following would NOT affect (shift)the short-run aggregate supply curve?

A change in _____ will cause a change in the quantity demanded of real GDP.

The short-run aggregate supply curve:

Aggregate supply shifts to the left when:

A solution to the simultaneous emergence of deflation and unemployment is to use policies that shift the:

Increased productivity causes the aggregate supply curve to shift to the left.

(Figure: Aggregate Demand Shift) The shift in aggregate demand depicted may be due to a(n):

Show graphically the difference between a movement along an aggregate demand curve and a shift to a new aggregate demand curve.Explain what causes each.

A rising aggregate price level _______ an economy's interest rates and therefore _____ output demanded.

When interest rates drop,investment will increase and the aggregate demand curve will shift to the right.

The 1973 oil shocks created:

Short-run macroeconomic equilibrium cannot be achieved when:

High taxes and/or heavy regulation:

The long-run aggregate supply curve represents the full-employment capacity of the economy.

The Great Depression was characterized by a lack of aggregate demand.

Which of the following statements regarding the short-run aggregate supply curve is TRUE?

The aggregate demand curve shows the relationship between nominal GDP and the price level.

If the marginal propensity to consume is 0.8,then $80 of every additional $100 of income will be spent on consumption.

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

(Figure: Determining Aggregate Equilibrium Levels) Equilibrium output is and the equilibrium price level is .

A rising aggregate price level ___ an economy's interest rates and therefore _ output demanded.