Question 1

All of the following are determinants of aggregate supply EXCEPT:

Accepted Answer

A)  productivity. 
B)  taxes. 
C)  subsidies. 
D)  net exports. 
A)  productivity. 
B)  taxes. 
C)  subsidies. 
D)  net exports.

Question 2

The long-run economic growth model assumes that:

Accepted Answer

A)  the economy always moves toward equilibrium at full employment. 
B)  the long run takes a long time to arrive. 
C)  macroeconomic equilibrium at full employment is only a theory and has little to do with reality. 
D)  the economy is at all times at full employment. 
A)  the economy always moves toward equilibrium at full employment. 
B)  the long run takes a long time to arrive. 
C)  macroeconomic equilibrium at full employment is only a theory and has little to do with reality. 
D)  the economy is at all times at full employment.

Question 3

Which of the following will NOT shift the aggregate supply curve to the left?

Accepted Answer

A)  an increase in the minimum wage 
B)  a decrease in corporate taxes 
C)  an increase in the price of crude oil 
D)  an increase in the legislated amount of paid vacation 
A)  an increase in the minimum wage 
B)  a decrease in corporate taxes 
C)  an increase in the price of crude oil 
D)  an increase in the legislated amount of paid vacation

Question 4

If an economy is on the vertical portion of the aggregate supply curve,then it:

Accepted Answer

A)  is overheating. 
B)  is at full employment. 
C)  has high unemployment. 
D)  is in a severe recession. 
A)  is overheating. 
B)  is at full employment. 
C)  has high unemployment. 
D)  is in a severe recession.

Question 5

In the long run,attempts to expand beyond an economy's natural rate of unemployment tend to result in:

Accepted Answer

A)  increased inflation. 
B)  increased output. 
C)  both increased output and increased inflation. 
D)  neither increased output nor increased inflation. 
A)  increased inflation. 
B)  increased output. 
C)  both increased output and increased inflation. 
D)  neither increased output nor increased inflation.

Question 6

The short-run supply curve slopes up because:

Accepted Answer

A)  profits increase at higher price levels. 
B)  productivity increases at higher price levels. 
C)  wages increase at higher output in the short run. 
D)  resource costs increase at higher price levels. 
A)  profits increase at higher price levels. 
B)  productivity increases at higher price levels. 
C)  wages increase at higher output in the short run. 
D)  resource costs increase at higher price levels.

Question 7

The aggregate demand curve is positively sloped.

Accepted Answer

A) True 
 B)False

Question 8

What would cause inflation to rise and employment to increase?

Accepted Answer

A)  a shift of the AS curve to the left 
B)  a shift of the AD curve to the left 
C)  a shift of the AS curve to the right 
D)  a shift of the AD curve to the right 
A)  a shift of the AS curve to the left 
B)  a shift of the AD curve to the left 
C)  a shift of the AS curve to the right 
D)  a shift of the AD curve to the right

Question 9

The full-employment level is greater than the natural rate of employment.

Accepted Answer

A) True 
 B)False

Question 10

Because of the wealth effect,a rising aggregate price level ____ the purchasing power of wealth 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 11

According to the text,what brought us out of the Great Depression?

Accepted Answer

A)  increase in investment 
B)  increase in consumption 
C)  decrease in the interest rate 
D)  spending on World War II 
A)  increase in investment 
B)  increase in consumption 
C)  decrease in the interest rate 
D)  spending on World War II

Question 12

Government spending on Social Security:

Accepted Answer

A)  has no impact on aggregate demand. 
B)  increases aggregate demand. 
C)  decreases aggregate demand. 
D)  hurts investment. 
A)  has no impact on aggregate demand. 
B)  increases aggregate demand. 
C)  decreases aggregate demand. 
D)  hurts investment.

Question 13

Demand-pull inflation is caused by:

Accepted Answer

A)  increases in wages pulling up prices. 
B)  increases in aggregate demand. 
C)  decreases in aggregate supply. 
D)  consumers demanding better quality,which increases costs. 
A)  increases in wages pulling up prices. 
B)  increases in aggregate demand. 
C)  decreases in aggregate supply. 
D)  consumers demanding better quality,which increases costs.

Question 14

Increased consumer confidence will shift the aggregate demand curve to the _____ and _____ output demanded.

Accepted Answer

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

Question 15

An increase in interest rates will lead to an increase in aggregate demand.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would NOT cause a rightward shift in aggregate supply?

Accepted Answer

A)  an increase in production by employees 
B)  a decrease in wages paid to employees 
C)  fear of inflation 
D)  a decrease in tax receipts 
A)  an increase in production by employees 
B)  a decrease in wages paid to employees 
C)  fear of inflation 
D)  a decrease in tax receipts

Question 17

The long-run aggregate supply curve uses the classical assumptions that all variables are __________ in the long run and that long-run equilibrium occurs at ___________________.

Accepted Answer

A)  flexible;full employment 
B)  flexible;less than full employment 
C)  fixed;less than full employment 
D)  fixed;full employment 
A)  flexible;full employment 
B)  flexible;less than full employment 
C)  fixed;less than full employment 
D)  fixed;full employment

Question 18

The _____ is positively sloped because some input costs are slow to change.

Accepted Answer

A)  short-run aggregate supply curve 
B)  long-run aggregate supply curve 
C)  short-run aggregate demand curve 
D)  long-run aggregate demand curve 
A)  short-run aggregate supply curve 
B)  long-run aggregate supply curve 
C)  short-run aggregate demand curve 
D)  long-run aggregate demand curve

Question 19

What would cause the price level to rise and employment to increase?

Accepted Answer

A)  a shift to the left of the aggregate demand curve 
B)  a shift to the right of the aggregate demand curve 
C)  a shift to the left of the short-run aggregate supply curve 
D)  supply shift to the right of the short-run aggregate supply curve 
A)  a shift to the left of the aggregate demand curve 
B)  a shift to the right of the aggregate demand curve 
C)  a shift to the left of the short-run aggregate supply curve 
D)  supply shift to the right of the short-run aggregate supply curve

Question 20

Which of the following factors is NOT a determinant of aggregate supply?

Accepted Answer

A)  income 
B)  taxes on business 
C)  input prices 
D)  regulation 
A)  income 
B)  taxes on business 
C)  input prices 
D)  regulation

All of the following are determinants of aggregate supply EXCEPT:

The long-run economic growth model assumes that:

Which of the following will NOT shift the aggregate supply curve to the left?

If an economy is on the vertical portion of the aggregate supply curve,then it:

In the long run,attempts to expand beyond an economy's natural rate of unemployment tend to result in:

The short-run supply curve slopes up because:

The aggregate demand curve is positively sloped.

What would cause inflation to rise and employment to increase?

The full-employment level is greater than the natural rate of employment.

Because of the wealth effect,a rising aggregate price level the purchasing power of wealth and therefore _ output demanded.

According to the text,what brought us out of the Great Depression?

Government spending on Social Security:

Demand-pull inflation is caused by:

Increased consumer confidence will shift the aggregate demand curve to the _ and _ output demanded.

An increase in interest rates will lead to an increase in aggregate demand.

Which of the following would NOT cause a rightward shift in aggregate supply?

The long-run aggregate supply curve uses the classical assumptions that all variables are in the long run and that long-run equilibrium occurs at _________.

The _____ is positively sloped because some input costs are slow to change.

What would cause the price level to rise and employment to increase?

Which of the following factors is NOT a determinant of aggregate supply?

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

All of the following are determinants of aggregate supply EXCEPT:

The long-run economic growth model assumes that:

Which of the following will NOT shift the aggregate supply curve to the left?

If an economy is on the vertical portion of the aggregate supply curve,then it:

In the long run,attempts to expand beyond an economy's natural rate of unemployment tend to result in:

The short-run supply curve slopes up because:

The aggregate demand curve is positively sloped.

What would cause inflation to rise and employment to increase?

The full-employment level is greater than the natural rate of employment.

Because of the wealth effect,a rising aggregate price level ____ the purchasing power of wealth and therefore _____ output demanded.

According to the text,what brought us out of the Great Depression?

Government spending on Social Security:

Demand-pull inflation is caused by:

Increased consumer confidence will shift the aggregate demand curve to the _____ and _____ output demanded.

An increase in interest rates will lead to an increase in aggregate demand.

Which of the following would NOT cause a rightward shift in aggregate supply?

The long-run aggregate supply curve uses the classical assumptions that all variables are __________ in the long run and that long-run equilibrium occurs at ___________________.

The _____ is positively sloped because some input costs are slow to change.

What would cause the price level to rise and employment to increase?

Which of the following factors is NOT a determinant of aggregate supply?

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

Because of the wealth effect,a rising aggregate price level the purchasing power of wealth and therefore _ output demanded.

Increased consumer confidence will shift the aggregate demand curve to the _ and _ output demanded.

The long-run aggregate supply curve uses the classical assumptions that all variables are in the long run and that long-run equilibrium occurs at _________.