Exam 20: Aggregate Demand and Aggregate Supply: Part B

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When the price level rises unexpectedly,some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production.

(True/False)

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Question 21

Stagflation results from continued decreases in aggregate demand.

(True/False)

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Question 22

Most macroeconomic variables that measure some type of income,spending,or production fluctuate closely together.

(True/False)

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Question 23

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

(True/False)

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Question 24

If aggregate demand shifts right,then eventually price level expectations rise.The increase in price level expectations causes the short-run aggregate-supply curve to shift to the left.

(True/False)

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Question 25

The model of aggregate demand and aggregate supply is nothing more than a large version of the model of market demand and market supply.

(True/False)

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Question 26

A decrease in the money supply will shift the long-run aggregate-supply curve to the left.

(True/False)

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Question 27

The theory of short-run economic fluctuations is uncontroversial.

(True/False)

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Question 28

John Maynard Keynes advocated policies that would increase aggregate demand as a way to decrease unemployment caused by recessions.

(True/False)

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Question 29

If speculators bid up the value of the dollar in the market for foreign-currency exchange,U.S.aggregate demand would shift to the left.

(True/False)

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Question 30

We can explain continued increases in both output and the price level by supposing that only aggregate demand shifted right over time.

(True/False)

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Question 31

The explanations for the slopes of the aggregate demand and short-run aggregate supply curves are the same as the explanations for the slopes of demand and supply curves for specific goods and services.

(True/False)

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Question 32

During World War II government expenditures increased almost five-fold and output almost doubled.

(True/False)

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Question 33

Increased optimism about the future leads to rising prices and falling unemployment in the short run.

(True/False)

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Question 34

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

(True/False)

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Question 35

When output rises,unemployment falls.

(True/False)

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Question 36

Technological progress shifts the long-run aggregate supply curve to the right.

(True/False)

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Question 37

An increase in the actual price level does not shift the short-run aggregate supply curve,but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

(True/False)

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Question 38

Like real GDP,investment fluctuates,but it fluctuates much less than real GDP.

(True/False)

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Question 39

Because the price level does not affect the long-run determinants of real GDP,the long-run aggregate-supply is vertical.

(True/False)

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Question 40

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Exam 20: Aggregate Demand and Aggregate Supply: Part B

When the price level rises unexpectedly,some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production.

Stagflation results from continued decreases in aggregate demand.

Most macroeconomic variables that measure some type of income,spending,or production fluctuate closely together.

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

If aggregate demand shifts right,then eventually price level expectations rise.The increase in price level expectations causes the short-run aggregate-supply curve to shift to the left.

The model of aggregate demand and aggregate supply is nothing more than a large version of the model of market demand and market supply.

A decrease in the money supply will shift the long-run aggregate-supply curve to the left.

The theory of short-run economic fluctuations is uncontroversial.

John Maynard Keynes advocated policies that would increase aggregate demand as a way to decrease unemployment caused by recessions.

If speculators bid up the value of the dollar in the market for foreign-currency exchange,U.S.aggregate demand would shift to the left.

We can explain continued increases in both output and the price level by supposing that only aggregate demand shifted right over time.

The explanations for the slopes of the aggregate demand and short-run aggregate supply curves are the same as the explanations for the slopes of demand and supply curves for specific goods and services.

During World War II government expenditures increased almost five-fold and output almost doubled.

Increased optimism about the future leads to rising prices and falling unemployment in the short run.

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

When output rises,unemployment falls.

Technological progress shifts the long-run aggregate supply curve to the right.

An increase in the actual price level does not shift the short-run aggregate supply curve,but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

Like real GDP,investment fluctuates,but it fluctuates much less than real GDP.

Because the price level does not affect the long-run determinants of real GDP,the long-run aggregate-supply is vertical.

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion