Question 1

An increase in aggregate demand is seen as a(n)_____ the aggregate demand curve.

Accepted Answer

A)  shift to the right of 
B)  downward movement along 
C)  upward movement along 
D)  shift to the left of 
A)  shift to the right of 
B)  downward movement along 
C)  upward movement along 
D)  shift to the left of

Question 2

In the long run,the economy is:

Accepted Answer

A)  self-correcting,as commodity prices rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium. 
B)  self-correcting,as prices of goods that are sticky in the short run become very flexible in the long run and thus move the economy to full employment. 
C)  fluctuating,as nominal wages rise and fall during short-run economic fluctuations. 
D)  self-correcting,as nominal wages rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium. 
A)  self-correcting,as commodity prices rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium. 
B)  self-correcting,as prices of goods that are sticky in the short run become very flexible in the long run and thus move the economy to full employment. 
C)  fluctuating,as nominal wages rise and fall during short-run economic fluctuations. 
D)  self-correcting,as nominal wages rise during recessionary gaps and fall during inflationary gaps to move the economy to long-run equilibrium.

Question 3

Use the following to answer questions:  
-(Figure: Policy Alternatives)Refer to Figure: Policy Alternatives.In panel (b),the economy is initially in short-run equilibrium at real GDP level Y1 and price level P2.If the government decides to intervene,it will MOST likely:

Accepted Answer

A)  increase taxes. 
B)  decrease the quantity of money. 
C)  increase its spending. 
D)  decrease its spending. 
A)  increase taxes. 
B)  decrease the quantity of money. 
C)  increase its spending. 
D)  decrease its spending.

Question 4

When the economy is in stagflation,the price level is falling.

Accepted Answer

A) True 
 B)False

Question 5

Use the following to answer questions:  
-(Figure: AD-AS Model I)Refer to Figure: AD-AS Model I.If the economy is at point X,the appropriate monetary policy is to:

Accepted Answer

A)  increase taxes and decrease government spending. 
B)  decrease taxes and increase government spending. 
C)  increase the money supply and decrease interest rates. 
D)  decrease the money supply and increase interest rates. 
A)  increase taxes and decrease government spending. 
B)  decrease taxes and increase government spending. 
C)  increase the money supply and decrease interest rates. 
D)  decrease the money supply and increase interest rates.

An increase in aggregate demand is seen as a(n)_____ the aggregate demand curve.

In the long run,the economy is:

Use the following to answer questions: -(Figure: Policy Alternatives)Refer to Figure: Policy Alternatives.In panel (b),the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂.If the government decides to intervene,it will MOST likely:

When the economy is in stagflation,the price level is falling.

Use the following to answer questions: -(Figure: AD-AS Model I)Refer to Figure: AD-AS Model I.If the economy is at point X,the appropriate monetary policy is to:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Exam 12: Aggregate Demand and Aggregate Supply

An increase in aggregate demand is seen as a(n)_____ the aggregate demand curve.

In the long run,the economy is:

Use the following to answer questions: -(Figure: Policy Alternatives)Refer to Figure: Policy Alternatives.In panel (b),the economy is initially in short-run equilibrium at real GDP level Y1 and price level P2.If the government decides to intervene,it will MOST likely:

When the economy is in stagflation,the price level is falling.

Use the following to answer questions: -(Figure: AD-AS Model I)Refer to Figure: AD-AS Model I.If the economy is at point X,the appropriate monetary policy is to:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Use the following to answer questions: -(Figure: Policy Alternatives)Refer to Figure: Policy Alternatives.In panel (b),the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂.If the government decides to intervene,it will MOST likely: