Question 1

Simultaneous recession and deflation can be explained by:

Accepted Answer

A)  an increase in aggregate supply. 
B)  a rise in aggregate demand. 
C)  a drop in aggregate demand. 
D)  a decrease in aggregate supply. 
A)  an increase in aggregate supply. 
B)  a rise in aggregate demand. 
C)  a drop in aggregate demand. 
D)  a decrease in aggregate supply.

Question 2

The output of all the goods and services demanded in an economy at various price levels is called:

Accepted Answer

A)  the quantity-price locus. 
B)  aggregate demand. 
C)  economic production. 
D)  the price-output curve. 
A)  the quantity-price locus. 
B)  aggregate demand. 
C)  economic production. 
D)  the price-output curve.

Question 3

Which of the following events will shift the aggregate demand curve to the right?

Accepted Answer

A)  a catastrophic hurricane hitting the northeastern United States 
B)  an increase in household debt 
C)  decreased taxes 
D)  decrease in military spending 
A)  a catastrophic hurricane hitting the northeastern United States 
B)  an increase in household debt 
C)  decreased taxes 
D)  decrease in military spending

Question 4

The long-run aggregate supply curve is vertical because of the assumption that all variables are fixed in the long run.

Accepted Answer

A) True 
 B)False

Question 5

The oil shock of 1973 led to demand-pull inflation.

Accepted Answer

A) True 
 B)False

Question 6

Falling interest rates mean increased business investment and a resulting increase in quantity demand for real GDP in the aggregate economy.

Accepted Answer

A) True 
 B)False

Question 7

Aggregate supply is:

Accepted Answer

A)  the real GDP that firms will produce at varying price levels. 
B)  the total supply over a span of several years. 
C)  the amount of goods,but not services,firms supply at various price levels. 
D)  the amount of output that is sold at each price level. 
A)  the real GDP that firms will produce at varying price levels. 
B)  the total supply over a span of several years. 
C)  the amount of goods,but not services,firms supply at various price levels. 
D)  the amount of output that is sold at each price level.

Question 8

An increase in subsidies will lead to an increase in aggregate supply.

Accepted Answer

A) True 
 B)False

Question 9

Policymakers can increase output by enacting policies that expand government spending,consumption,investment,or net exports or reduce taxes.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following will shift the aggregate supply curve to the right?

Accepted Answer

A)  the development of a cartel in the production of soybeans 
B)  an increase in corporate taxes 
C)  increased investment in human capital 
D)  an increase in the price of garbage collection 
A)  the development of a cartel in the production of soybeans 
B)  an increase in corporate taxes 
C)  increased investment in human capital 
D)  an increase in the price of garbage collection

Question 11

John Maynard Keynes's analysis was based on an economy whose resources were underutilized.

Accepted Answer

A) True 
 B)False

Question 12

The U.S.price level rose more than expected after the 2008-2009 stimulus.

Accepted Answer

A) True 
 B)False

Question 13

A shift of the aggregate _______ curve to the ________ would cause inflation to rise and employment to increase.

Accepted Answer

A)  supply;left 
B)  demand;left 
C)  supply;right 
D)  demand;right 
A)  supply;left 
B)  demand;left 
C)  supply;right 
D)  demand;right

Question 14

Which of the following events causes a decrease in aggregate demand?

Accepted Answer

A)  consumer confidence improves 
B)  taxes increase 
C)  interest rates fall 
D)  government spending increases 
A)  consumer confidence improves 
B)  taxes increase 
C)  interest rates fall 
D)  government spending increases

Question 15

Which of the following factors is NOT a component of aggregate demand?

Accepted Answer

A)  consumption 
B)  investment 
C)  income 
D)  net exports 
A)  consumption 
B)  investment 
C)  income 
D)  net exports

Question 16

The Potbelly Pothole Company is undertaking some investment in its plant.Suppose interest rates fall and new technologies increase the return on its investment.What is likely to happen?

Accepted Answer

A)  The company's demand for investment will fall. 
B)  There will be no change in the company's demand for investment. 
C)  The company's demand for investment will first fall as interest rates fall and then rise as technology improves. 
D)  The company's demand for investment will rise. 
A)  The company's demand for investment will fall. 
B)  There will be no change in the company's demand for investment. 
C)  The company's demand for investment will first fall as interest rates fall and then rise as technology improves. 
D)  The company's demand for investment will rise.

Question 17

A product demand curve and the aggregate demand curve are negatively sloped for the same reasons.

Accepted Answer

A) True 
 B)False

Question 18

The Great Depression was primarily the result of:

Accepted Answer

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

Question 19

If the U.S.aggregate price level rises:

Accepted Answer

A)  U.S.imports rise. 
B)  the aggregate demand curve shifts to the left. 
C)  the aggregate demand curve shifts to the right. 
D)  business investment increases. 
A)  U.S.imports rise. 
B)  the aggregate demand curve shifts to the left. 
C)  the aggregate demand curve shifts to the right. 
D)  business investment increases.

Question 20

The long-run aggregate supply curve is vertical because:

Accepted Answer

A)  many inputs are fixed. 
B)  it incorporates the assumptions of Keynesian theory. 
C)  the economy will gravitate to the position of full employment when all variables are flexible. 
D)  wages,prices,and interest rates are not flexible in the long run. 
A)  many inputs are fixed. 
B)  it incorporates the assumptions of Keynesian theory. 
C)  the economy will gravitate to the position of full employment when all variables are flexible. 
D)  wages,prices,and interest rates are not flexible in the long run.

Simultaneous recession and deflation can be explained by:

The output of all the goods and services demanded in an economy at various price levels is called:

Which of the following events will shift the aggregate demand curve to the right?

The long-run aggregate supply curve is vertical because of the assumption that all variables are fixed in the long run.

The oil shock of 1973 led to demand-pull inflation.

Falling interest rates mean increased business investment and a resulting increase in quantity demand for real GDP in the aggregate economy.

Aggregate supply is:

An increase in subsidies will lead to an increase in aggregate supply.

Policymakers can increase output by enacting policies that expand government spending,consumption,investment,or net exports or reduce taxes.

Which of the following will shift the aggregate supply curve to the right?

John Maynard Keynes's analysis was based on an economy whose resources were underutilized.

The U.S.price level rose more than expected after the 2008-2009 stimulus.

A shift of the aggregate _ curve to the __ would cause inflation to rise and employment to increase.

Which of the following events causes a decrease in aggregate demand?

Which of the following factors is NOT a component of aggregate demand?

The Potbelly Pothole Company is undertaking some investment in its plant.Suppose interest rates fall and new technologies increase the return on its investment.What is likely to happen?

A product demand curve and the aggregate demand curve are negatively sloped for the same reasons.

The Great Depression was primarily the result of:

If the U.S.aggregate price level rises:

The long-run aggregate supply curve is vertical because:

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

Simultaneous recession and deflation can be explained by:

The output of all the goods and services demanded in an economy at various price levels is called:

Which of the following events will shift the aggregate demand curve to the right?

The long-run aggregate supply curve is vertical because of the assumption that all variables are fixed in the long run.

The oil shock of 1973 led to demand-pull inflation.

Falling interest rates mean increased business investment and a resulting increase in quantity demand for real GDP in the aggregate economy.

Aggregate supply is:

An increase in subsidies will lead to an increase in aggregate supply.

Policymakers can increase output by enacting policies that expand government spending,consumption,investment,or net exports or reduce taxes.

Which of the following will shift the aggregate supply curve to the right?

John Maynard Keynes's analysis was based on an economy whose resources were underutilized.

The U.S.price level rose more than expected after the 2008-2009 stimulus.

A shift of the aggregate _______ curve to the ________ would cause inflation to rise and employment to increase.

Which of the following events causes a decrease in aggregate demand?

Which of the following factors is NOT a component of aggregate demand?

The Potbelly Pothole Company is undertaking some investment in its plant.Suppose interest rates fall and new technologies increase the return on its investment.What is likely to happen?

A product demand curve and the aggregate demand curve are negatively sloped for the same reasons.

The Great Depression was primarily the result of:

If the U.S.aggregate price level rises:

The long-run aggregate supply curve is vertical because:

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

A shift of the aggregate _ curve to the __ would cause inflation to rise and employment to increase.