Question 1

Economic growth is shown as a:

Accepted Answer

A)  shift to the left in the long-run aggregate supply curve. 
B)  movement up along the short-run aggregate supply curve. 
C)  shift to the right in the long-run aggregate supply curve. 
D)  shift to the left in the short-run aggregate supply curve. 
A)  shift to the left in the long-run aggregate supply curve. 
B)  movement up along the short-run aggregate supply curve. 
C)  shift to the right in the long-run aggregate supply curve. 
D)  shift to the left in the short-run aggregate supply curve.

Question 2

If the price level is stable and if aggregate spending increases,a significant change in output occurs (showing the full impact of the spending multiplier).

Accepted Answer

A) True 
 B)False

Question 3

Demand-pull inflation occurs when aggregate demand expands beyond the level necessary for full employment.

Accepted Answer

A) True 
 B)False

Question 4

One reason the price level did not rise after the 2008-2009 stimulus policy actions is that U.S.capacity was fully utilized.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following factors will cause the aggregate demand curve to shift to the left?

Accepted Answer

A)  rise in consumer confidence 
B)  fall in excess capacity at businesses 
C)  increase in foreign income 
D)  appreciation of the dollar 
A)  rise in consumer confidence 
B)  fall in excess capacity at businesses 
C)  increase in foreign income 
D)  appreciation of the dollar

Question 6

Describe the wealth effect that occurs when the price level rises.Support your response with an example.

Accepted Answer

One reason real output declines when the

Question 7

The Great Depression demonstrated that:

Accepted Answer

A)  there can be no macroeconomic equilibrium. 
B)  short-run equilibrium can occur at substantially less than full employment. 
C)  inflation is a worse problem than unemployment. 
D)  government intervention in the economy results in economic depressions. 
A)  there can be no macroeconomic equilibrium. 
B)  short-run equilibrium can occur at substantially less than full employment. 
C)  inflation is a worse problem than unemployment. 
D)  government intervention in the economy results in economic depressions.

Question 8

A vertical aggregate supply curve represents full employment in the long run.

Accepted Answer

A) True 
 B)False

Question 9

Cost-push inflation occurs when aggregate supply shifts to the right,causing the price level to increase along with rising unemployment.

Accepted Answer

A) True 
 B)False

Question 10

The short-run aggregate supply curve is positively sloped,since many input costs are slow to change in the short run.

Accepted Answer

A) True 
 B)False

Question 11

When the monopoly power of firms increases,short-run aggregate supply shifts to the left.

Accepted Answer

A) True 
 B)False

Question 12

The determinants of aggregate demand include the components of GDP: consumption,investment,government spending,and net exports.

Accepted Answer

A) True 
 B)False

Question 13

When government spending rises:

Accepted Answer

A)  aggregate demand rises. 
B)  aggregate demand falls. 
C)  the aggregate price level falls. 
D)  it crowds out net exports. 
A)  aggregate demand rises. 
B)  aggregate demand falls. 
C)  the aggregate price level falls. 
D)  it crowds out net exports.

Question 14

The short-run aggregate supply curve:

Accepted Answer

A)  is vertical because the economy is at full capacity. 
B)  is upward sloping because some costs are slow to rise as output expands. 
C)  is horizontal because input prices do not rise as output rises. 
D)  cannot be generalized because each economy is unique. 
A)  is vertical because the economy is at full capacity. 
B)  is upward sloping because some costs are slow to rise as output expands. 
C)  is horizontal because input prices do not rise as output rises. 
D)  cannot be generalized because each economy is unique.

Question 15

________ in wealth and ________ in government spending,along with a(n)_________ of the dollar,will shift the U.S.aggregate demand curve to the left.

Accepted Answer

A)  Decreases;increases;appreciation 
B)  Increases;decreases;appreciation 
C)  Decreases;decreases;depreciation 
D)  Decreases;decreases;appreciation 
A)  Decreases;increases;appreciation 
B)  Increases;decreases;appreciation 
C)  Decreases;decreases;depreciation 
D)  Decreases;decreases;appreciation

Question 16

A stronger dollar will shift the U.S.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 17

Suppose consumers fear that a recession is coming soon.How might this fear become a self-fulfilling prophecy?

Accepted Answer

If consumers become pessimistic about th

Question 18

In the short run,the aggregate supply curve is ____ because input prices are _____.

Accepted Answer

A)  positively sloped;not completely flexible 
B)  positively sloped;completely flexible 
C)  vertical;not completely flexible 
D)  vertical;completely flexible 
A)  positively sloped;not completely flexible 
B)  positively sloped;completely flexible 
C)  vertical;not completely flexible 
D)  vertical;completely flexible

Question 19

Demand-pull inflation is due to excessive spending on goods and services.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following will NOT cause a shift in the short-run aggregate supply curve?

Accepted Answer

A)  changes in the aggregate price level 
B)  changes in input prices 
C)  changes in productivity 
D)  changes in inflationary expectations 
A)  changes in the aggregate price level 
B)  changes in input prices 
C)  changes in productivity 
D)  changes in inflationary expectations

Economic growth is shown as a:

If the price level is stable and if aggregate spending increases,a significant change in output occurs (showing the full impact of the spending multiplier).

Demand-pull inflation occurs when aggregate demand expands beyond the level necessary for full employment.

One reason the price level did not rise after the 2008-2009 stimulus policy actions is that U.S.capacity was fully utilized.

Which of the following factors will cause the aggregate demand curve to shift to the left?

Describe the wealth effect that occurs when the price level rises.Support your response with an example.

The Great Depression demonstrated that:

A vertical aggregate supply curve represents full employment in the long run.

Cost-push inflation occurs when aggregate supply shifts to the right,causing the price level to increase along with rising unemployment.

The short-run aggregate supply curve is positively sloped,since many input costs are slow to change in the short run.

When the monopoly power of firms increases,short-run aggregate supply shifts to the left.

The determinants of aggregate demand include the components of GDP: consumption,investment,government spending,and net exports.

When government spending rises:

The short-run aggregate supply curve:

in wealth and in government spending,along with a(n)_ of the dollar,will shift the U.S.aggregate demand curve to the left.

A stronger dollar will shift the U.S.aggregate demand curve to the _ and _ output demanded.

Suppose consumers fear that a recession is coming soon.How might this fear become a self-fulfilling prophecy?

In the short run,the aggregate supply curve is because input prices are _.

Demand-pull inflation is due to excessive spending on goods and services.

Which of the following will NOT cause a shift in the short-run aggregate supply curve?

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

Economic growth is shown as a:

If the price level is stable and if aggregate spending increases,a significant change in output occurs (showing the full impact of the spending multiplier).

Demand-pull inflation occurs when aggregate demand expands beyond the level necessary for full employment.

One reason the price level did not rise after the 2008-2009 stimulus policy actions is that U.S.capacity was fully utilized.

Which of the following factors will cause the aggregate demand curve to shift to the left?

Describe the wealth effect that occurs when the price level rises.Support your response with an example.

The Great Depression demonstrated that:

A vertical aggregate supply curve represents full employment in the long run.

Cost-push inflation occurs when aggregate supply shifts to the right,causing the price level to increase along with rising unemployment.

The short-run aggregate supply curve is positively sloped,since many input costs are slow to change in the short run.

When the monopoly power of firms increases,short-run aggregate supply shifts to the left.

The determinants of aggregate demand include the components of GDP: consumption,investment,government spending,and net exports.

When government spending rises:

The short-run aggregate supply curve:

________ in wealth and ________ in government spending,along with a(n)_________ of the dollar,will shift the U.S.aggregate demand curve to the left.

A stronger dollar will shift the U.S.aggregate demand curve to the _____ and _____ output demanded.

Suppose consumers fear that a recession is coming soon.How might this fear become a self-fulfilling prophecy?

In the short run,the aggregate supply curve is ____ because input prices are _____.

Demand-pull inflation is due to excessive spending on goods and services.

Which of the following will NOT cause a shift in the short-run aggregate supply curve?

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

in wealth and in government spending,along with a(n)_ of the dollar,will shift the U.S.aggregate demand curve to the left.

A stronger dollar will shift the U.S.aggregate demand curve to the _ and _ output demanded.

In the short run,the aggregate supply curve is because input prices are _.