Question 1

Figure 33-11.  
-Refer to Figure 33-11.A movement from P1 and Y2,to P2 and Y1 would be consistent with

Accepted Answer

A) a decrease in consumption expenditures. 
B) stagflation. 
C) sticky-wages. 
D) an increase in net exports. 
A) a decrease in consumption expenditures. 
B) stagflation. 
C) sticky-wages. 
D) an increase in net exports.

Question 2

Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.

-Refer to Optimism.Which curve shifts and in which direction?

Accepted Answer

A) aggregate demand shifts right 
B) aggregate demand shifts left 
C) aggregate supply shifts right. 
D) aggregate supply shifts left. 
A) aggregate demand shifts right 
B) aggregate demand shifts left 
C) aggregate supply shifts right. 
D) aggregate supply shifts left.

Question 3

Figure 33-10.  
-Refer to Figure 33-10.If the economy starts at point A,a short-run fall in output would be consistent with a movement to point

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 4

Which of the following would cause prices to rise and real GDP to fall in the short run?

Accepted Answer

A) an increase in the expected price level. 
B) an increase in the capital stock. 
C) an increase in the money supply. 
D) an increase in taxes. 
A) an increase in the expected price level. 
B) an increase in the capital stock. 
C) an increase in the money supply. 
D) an increase in taxes.

Question 5

Figure 33-8.  
-Refer to Figure 33-8.Suppose the economy starts at Z.Stagflation would be consistent with the move to

Accepted Answer

A) P1 and Y1 . 
B) P1 and Y3 . 
C) P3 and Y1 . 
D) P3 and Y3 . 
A) P1 and Y1 . 
B) P1 and Y3 . 
C) P3 and Y1 . 
D) P3 and Y3 .

Question 6

During World War II,the economy's production increased about

Accepted Answer

A) 25 percent and prices rose about 5 percent. 
B) 50 percent and prices rose about 10 percent. 
C) 75 percent and prices rose about 15 percent. 
D) 100 percent and prices rose about 20 percent. 
A) 25 percent and prices rose about 5 percent. 
B) 50 percent and prices rose about 10 percent. 
C) 75 percent and prices rose about 15 percent. 
D) 100 percent and prices rose about 20 percent.

Question 7

The price level rises in the short run if

Accepted Answer

A) aggregate demand or aggregate supply shifts right. 
B) aggregate demand shifts right or aggregate supply shifts left. 
C) aggregate demand shifts left or aggregate supply shifts right. 
D) aggregate demand or aggregate supply shifts right 
A) aggregate demand or aggregate supply shifts right. 
B) aggregate demand shifts right or aggregate supply shifts left. 
C) aggregate demand shifts left or aggregate supply shifts right. 
D) aggregate demand or aggregate supply shifts right

Question 8

Consider the exhibit below for the following questions.
Figure 33-4  
-Refer to Figure 33-4.If the economy starts at A,a decrease in the money supply moves the economy

Accepted Answer

A) to A in the long run. 
B) to C in the long run. 
C) back to A in the long run. 
D) to D in the long run. 
A) to A in the long run. 
B) to C in the long run. 
C) back to A in the long run. 
D) to D in the long run.

Question 9

Other things the same,an increase in the expected price level shifts

Accepted Answer

A) short-run aggregate supply right. 
B) short-run aggregate supply left. 
C) aggregate-demand right. 
D) aggregated-demand left. 
A) short-run aggregate supply right. 
B) short-run aggregate supply left. 
C) aggregate-demand right. 
D) aggregated-demand left.

Question 10

Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.

-Refer to Pessimism.How is the new long-run equilibrium different from the original one?

Accepted Answer

A) both price and real GDP are higher. 
B) both price and real GDP are lower. 
C) the price level is the same and GDP is lower. 
D) the price level is lower and real GDP is the same. 
A) both price and real GDP are higher. 
B) both price and real GDP are lower. 
C) the price level is the same and GDP is lower. 
D) the price level is lower and real GDP is the same.

Question 11

In the short-run an increase in the costs of production makes

Accepted Answer

A) output and prices rise. 
B) output rise and prices fall. 
C) output fall and prices rise. 
D) output and prices fall. 
A) output and prices rise. 
B) output rise and prices fall. 
C) output fall and prices rise. 
D) output and prices fall.

Question 12

Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.

-Refer to Figure 33-7.Suppose the economy starts at Y.If there is a fall in aggregate demand,then the economy moves to

Accepted Answer

A) V in the long run. 
B) W in the long run. 
C) X in the long run. 
D) Z in the long run. 
A) V in the long run. 
B) W in the long run. 
C) X in the long run. 
D) Z in the long run.

Question 13

Figure 33-6.  
-Refer to Figure 33-6.Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Accepted Answer

A) LRAS1 
B) LRAS2 
C) LRAS3 
D) Both LRAS1 and LRAS3 
A) LRAS1 
B) LRAS2 
C) LRAS3 
D) Both LRAS1 and LRAS3

Question 14

Which of the following has been suggested as a cause of the Great Depression?

Accepted Answer

A) a decline in the money supply 
B) a decrease in stock prices 
C) the collapse of the banking system 
D) All of the above are correct. 
A) a decline in the money supply 
B) a decrease in stock prices 
C) the collapse of the banking system 
D) All of the above are correct.

Question 15

During World War II,

Accepted Answer

A) government purchases of goods and services increased fivefold. 
B) the economy's production increased about 25 percent. 
C) unemployment fell to about 5%. 
D) All of the above are correct. 
A) government purchases of goods and services increased fivefold. 
B) the economy's production increased about 25 percent. 
C) unemployment fell to about 5%. 
D) All of the above are correct.

Question 16

Consider the exhibit below for the following questions.
Figure 33-4  
-Refer to Figure 33-4.If the economy starts at A and moves to D in the short run,the economy

Accepted Answer

A) moves to A in the long run. 
B) moves to B in the long run. 
C) moves to C in the long run. 
D) stays at D in the long run. 
A) moves to A in the long run. 
B) moves to B in the long run. 
C) moves to C in the long run. 
D) stays at D in the long run.

Question 17

In the first few years of the Great Depression,unemployment rose to about

Accepted Answer

A) 10 percent,and prices rose about 14 percent. 
B) 15 percent,and prices rose about 22 percent. 
C) 20 percent,and prices fell about 14 percent. 
D) 25 percent,and prices fell about 22 percent. 
A) 10 percent,and prices rose about 14 percent. 
B) 15 percent,and prices rose about 22 percent. 
C) 20 percent,and prices fell about 14 percent. 
D) 25 percent,and prices fell about 22 percent.

Question 18

If aggregate demand shifts left,then in the short run

Accepted Answer

A) the price level and real GDP both rise. 
B) the price level rises and real GDP falls. 
C) the price level falls and real GDP rises. 
D) the price and real GDP both fall. 
A) the price level and real GDP both rise. 
B) the price level rises and real GDP falls. 
C) the price level falls and real GDP rises. 
D) the price and real GDP both fall.

Question 19

Which of the following alone can explain the change in the price level and output during World War II?

Accepted Answer

A) aggregate demand shifted right 
B) aggregate demand shifted left 
C) aggregate supply shifted right 
D) aggregate supply shifted left 
A) aggregate demand shifted right 
B) aggregate demand shifted left 
C) aggregate supply shifted right 
D) aggregate supply shifted left

Question 20

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

Accepted Answer

A) aggregate supply to the right. 
B) aggregate supply to the left. 
C) aggregate demand to the right. 
D) aggregate demand to the left. 
A) aggregate supply to the right. 
B) aggregate supply to the left. 
C) aggregate demand to the right. 
D) aggregate demand to the left.

Exam 20: Aggregate Demand and Aggregate Supply: Two Causes of Economic Fluctuations

Figure 33-11. -Refer to Figure 33-11.A movement from P1 and Y2,to P2 and Y1 would be consistent with

Figure 33-10. -Refer to Figure 33-10.If the economy starts at point A,a short-run fall in output would be consistent with a movement to point

Which of the following would cause prices to rise and real GDP to fall in the short run?

Figure 33-8. -Refer to Figure 33-8.Suppose the economy starts at Z.Stagflation would be consistent with the move to

During World War II,the economy's production increased about

The price level rises in the short run if

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4.If the economy starts at A,a decrease in the money supply moves the economy

Other things the same,an increase in the expected price level shifts

In the short-run an increase in the costs of production makes

Figure 33-6. -Refer to Figure 33-6.Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Which of the following has been suggested as a cause of the Great Depression?

During World War II,

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4.If the economy starts at A and moves to D in the short run,the economy

In the first few years of the Great Depression,unemployment rose to about

If aggregate demand shifts left,then in the short run

Which of the following alone can explain the change in the price level and output during World War II?

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

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

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Figure 33-11. -Refer to Figure 33-11.A movement from P₁ and Y₂,to P₂ and Y₁ would be consistent with