Question 1

If wages are sticky,then a greater than expected increase in the price level

Accepted Answer

A) raises the real costs of production,so the short-run aggregate supply curve shifts left. 
B) raises the real costs of production,so the aggregate quantity of goods and services declines. 
C) reduces the real costs of production,so the short-run aggregate supply curve shifts right. 
D) reduces the real costs of production,so the aggregate quantity of goods and services rises. 
A) raises the real costs of production,so the short-run aggregate supply curve shifts left. 
B) raises the real costs of production,so the aggregate quantity of goods and services declines. 
C) reduces the real costs of production,so the short-run aggregate supply curve shifts right. 
D) reduces the real costs of production,so the aggregate quantity of goods and services rises.

Question 2

Figure 33-3.  
-Refer to Figure 33-3.The natural rate of output occurs at

Accepted Answer

A) Y1. 
B) Y2. 
C) Y3. 
D) both Y1 and Y3. 
A) Y1. 
B) Y2. 
C) Y3. 
D) both Y1 and Y3.

Question 3

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

Accepted Answer

A) production is more profitable and employment rises. 
B) production is more profitable and employment falls. 
C) production is less profitable and employment rises. 
D) production is less profitable and employment falls. 
A) production is more profitable and employment rises. 
B) production is more profitable and employment falls. 
C) production is less profitable and employment rises. 
D) production is less profitable and employment falls.

Question 4

The long-run aggregate supply curve shifts right if

Accepted Answer

A) the price level rises. 
B) the price level falls. 
C) the capital stock increases. 
D) the capital stock decreases. 
A) the price level rises. 
B) the price level falls. 
C) the capital stock increases. 
D) the capital stock decreases.

Question 5

Other things the same,continued increases in the money supply lead to

Accepted Answer

A) continued increases in the price level and real GDP. 
B) continued increases in the price level but not continued increases in real GDP. 
C) continued increases in real GDP but not continued increases in the price level. 
D) a one-time permanent increase in both prices and real GDP. 
A) continued increases in the price level and real GDP. 
B) continued increases in the price level but not continued increases in real GDP. 
C) continued increases in real GDP but not continued increases in the price level. 
D) a one-time permanent increase in both prices and real GDP.

Question 6

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected,then some firms believe that the relative price of what they produce has

Accepted Answer

A) decreased,so they increase production. 
B) decreased,so they decrease production. 
C) increased,so they increase production. 
D) increased,so they decrease production. 
A) decreased,so they increase production. 
B) decreased,so they decrease production. 
C) increased,so they increase production. 
D) increased,so they decrease production.

Question 7

A decrease in the expected price level shifts

Accepted Answer

A) only the long-run aggregate supply curve right. 
B) only the short-run aggregate supply curve right. 
C) both the short-run and the long-run aggregate supply curve right. 
D) Neither the short-run nor the long-run aggregate supply curve right. 
A) only the long-run aggregate supply curve right. 
B) only the short-run aggregate supply curve right. 
C) both the short-run and the long-run aggregate supply curve right. 
D) Neither the short-run nor the long-run aggregate supply curve right.

Question 8

Which of the following shifts long-run aggregate supply right?

Accepted Answer

A) an increase in either technology or the human capital stock. 
B) an increase in human capital but not technology. 
C) an increase in technology,but not the human capital stock. 
D) neither an increase in technology nor the human capital stock. 
A) an increase in either technology or the human capital stock. 
B) an increase in human capital but not technology. 
C) an increase in technology,but not the human capital stock. 
D) neither an increase in technology nor the human capital stock.

Question 9

The sticky-wage theory of the short-run aggregate supply curve says that the quantity of output firms supply will increase if

Accepted Answer

A) the price level is higher than expected making production more profitable. 
B) the price level is higher than expected making production less profitable. 
C) the price level is lower than expected making production more profitable 
D) the price level is higher than expected making production less profitable 
A) the price level is higher than expected making production more profitable. 
B) the price level is higher than expected making production less profitable. 
C) the price level is lower than expected making production more profitable 
D) the price level is higher than expected making production less profitable

Question 10

In the long run,an economy's production of goods and services depends on its supply of​

Accepted Answer

A) ​labor,natural resources,capital,and available technology. 
B) ​labor,natural resources,and capital only. 
C) ​labor,and natural resources only. 
D) ​labor only. 
A) ​labor,natural resources,capital,and available technology. 
B) ​labor,natural resources,and capital only. 
C) ​labor,and natural resources only. 
D) ​labor only.

Question 11

Other things the same,if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent,then

Accepted Answer

A) employment and production rise. 
B) employment rises and production falls. 
C) employment falls and production rises. 
D) employment and production fall. 
A) employment and production rise. 
B) employment rises and production falls. 
C) employment falls and production rises. 
D) employment and production fall.

Question 12

The long-run aggregate supply curve would shift left if the amount of labor available

Accepted Answer

A) increased or Congress made a substantial increase in the minimum wage. 
B) decreased or Congress abolished the minimum wage. 
C) increased or Congress abolished the minimum wage. 
D) decreased or Congress made a substantial increase in the minimum wage. 
A) increased or Congress made a substantial increase in the minimum wage. 
B) decreased or Congress abolished the minimum wage. 
C) increased or Congress abolished the minimum wage. 
D) decreased or Congress made a substantial increase in the minimum wage.

Question 13

Other things the same,if the price level is lower than expected,then some firms believe that the relative price of what they produce has

Accepted Answer

A) decreased,so they increase production. 
B) decreased,so they decrease production. 
C) increased,so they increase production. 
D) increased,so they decrease production. 
A) decreased,so they increase production. 
B) decreased,so they decrease production. 
C) increased,so they increase production. 
D) increased,so they decrease production.

Question 14

Wages tend to be sticky

Accepted Answer

A) because of contracts,social norms,and notions of fairness. 
B) because of contracts,but not social norms or notions of fairness. 
C) because of social norms and notions of fairness,but not contracts. 
D) None of the above are correct. 
A) because of contracts,social norms,and notions of fairness. 
B) because of contracts,but not social norms or notions of fairness. 
C) because of social norms and notions of fairness,but not contracts. 
D) None of the above are correct.

Question 15

An unexpected increase in the price level that temporarily lowers real wages and induces more employment and output in an economy,occurs in

Accepted Answer

A) nominal-supply theory. 
B) stagflation. 
C) misperceptions theory. 
D) sticky-wage theory. 
A) nominal-supply theory. 
B) stagflation. 
C) misperceptions theory. 
D) sticky-wage theory.

Question 16

Other things the same,if the long-run aggregate supply curve shifts left,prices

Accepted Answer

A) and output both increase. 
B) and output both decrease. 
C) increase and output decreases. 
D) decrease and output increases. 
A) and output both increase. 
B) and output both decrease. 
C) increase and output decreases. 
D) decrease and output increases.

Question 17

In the long run,an increase in the stock of human capital

Accepted Answer

A) and increases in the money supply both make the price level rise. 
B) and increases in the money supply both make the price level fall. 
C) makes the price level rise,while increases in the money supply make prices fall. 
D) makes the price level fall,while increases in the money supply make prices rise. 
A) and increases in the money supply both make the price level rise. 
B) and increases in the money supply both make the price level fall. 
C) makes the price level rise,while increases in the money supply make prices fall. 
D) makes the price level fall,while increases in the money supply make prices rise.

Question 18

A decrease in the expected price level shifts short-run aggregate supply to the

Accepted Answer

A) right,and an increase in the actual price level shifts short-run aggregate supply to the right. 
B) right,and an increase in the actual price level does not shift short-run aggregate supply. 
C) left,and an increase in the actual price level shifts short-run aggregate supply to the left. 
D) left,and an increase in the actual price level does not shift short-run aggregate supply. 
A) right,and an increase in the actual price level shifts short-run aggregate supply to the right. 
B) right,and an increase in the actual price level does not shift short-run aggregate supply. 
C) left,and an increase in the actual price level shifts short-run aggregate supply to the left. 
D) left,and an increase in the actual price level does not shift short-run aggregate supply.

Question 19

Which of the following,other things the same,would make the price level decrease and real GDP increase?

Accepted Answer

A) long-run aggregate supply shifts right 
B) long-run aggregate supply shifts left 
C) aggregate demand shifts right 
D) aggregate demand shifts left 
A) long-run aggregate supply shifts right 
B) long-run aggregate supply shifts left 
C) aggregate demand shifts right 
D) aggregate demand shifts left

Question 20

Other things the same,if prices fell when firms and workers were expecting them to rise,then

Accepted Answer

A) employment and production would rise. 
B) employment would rise and production would fall. 
C) employment would fall and production would rise. 
D) employment and production would fall. 
A) employment and production would rise. 
B) employment would rise and production would fall. 
C) employment would fall and production would rise. 
D) employment and production would fall.

Exam 20: Aggregate Demand and Aggregate Supply: The Aggregate-Supply Curve

If wages are sticky,then a greater than expected increase in the price level

Figure 33-3. -Refer to Figure 33-3.The natural rate of output occurs at

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

The long-run aggregate supply curve shifts right if

Other things the same,continued increases in the money supply lead to

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected,then some firms believe that the relative price of what they produce has

A decrease in the expected price level shifts

Which of the following shifts long-run aggregate supply right?

The sticky-wage theory of the short-run aggregate supply curve says that the quantity of output firms supply will increase if

In the long run,an economy's production of goods and services depends on its supply of​

Other things the same,if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent,then

The long-run aggregate supply curve would shift left if the amount of labor available

Other things the same,if the price level is lower than expected,then some firms believe that the relative price of what they produce has

Wages tend to be sticky

An unexpected increase in the price level that temporarily lowers real wages and induces more employment and output in an economy,occurs in

Other things the same,if the long-run aggregate supply curve shifts left,prices

In the long run,an increase in the stock of human capital

A decrease in the expected price level shifts short-run aggregate supply to the

Which of the following,other things the same,would make the price level decrease and real GDP increase?

Other things the same,if prices fell when firms and workers were expecting them to rise,then

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

In the long run,an economy's production of goods and services depends on its supply of