Question 1

Cost-push inflation is caused by:

Accepted Answer

A) an increase in aggregate demand. 
B) a decrease in aggregate demand. 
C) an increase in aggregate supply. 
D) a decrease in aggregate supply. 
A) an increase in aggregate demand. 
B) a decrease in aggregate demand. 
C) an increase in aggregate supply. 
D) a decrease in aggregate supply.

Question 2

Any permanent change in the quantity of any factor of production available - capital, technology, land, or labor - can cause a shift in both the long-run and short-run aggregate supply curves.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following do not increase U.S.aggregate demand?

Accepted Answer

A) a lower price level, increasing citizen's real wealth 
B) a lower price level, reducing interest rates 
C) a lower price level, increasing exports and decreasing imports 
D) All of the above increase U.S. aggregate demand. 
E) None of the above increase U.S. aggregate demand. 
A) a lower price level, increasing citizen's real wealth 
B) a lower price level, reducing interest rates 
C) a lower price level, increasing exports and decreasing imports 
D) All of the above increase U.S. aggregate demand. 
E) None of the above increase U.S. aggregate demand.

Question 4

If wheat prices rose by 12 percent when producers thought other prices were rising by 15 percent,

Accepted Answer

A) wheat output would tend to rise as a result. 
B) wheat output would tend to fall as a result. 
C) wheat output would tend to remain unchanged as a result. 
D) we could not predict the likely change in wheat output that would result. 
A) wheat output would tend to rise as a result. 
B) wheat output would tend to fall as a result. 
C) wheat output would tend to remain unchanged as a result. 
D) we could not predict the likely change in wheat output that would result.

Question 5

As savings grow in an economy, economic growth rises.

Accepted Answer

A) True 
 B)False

Question 6

Greater and more extensive government regulations of safety standards and environmental controls will have what effect on short-run and long-run aggregate supply?

Accepted Answer

Increased government regulation, limits,

Question 7

Discuss some of the reasons behind downward stickiness of wages and prices.

Accepted Answer

Empirical evidence supports several expl

Question 8

The SRAS curve is vertical at the natural level of real output.

Accepted Answer

A) True 
 B)False

Question 9

If some non-price level determinant causes total spending to decrease, then the effect on aggregate demand will be a:

Accepted Answer

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

Question 10

An increase in disposable income would tend to shift aggregate demand right.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in the price level will:

Accepted Answer

A) increase the quantity of RGDP supplied, but not increase short-run aggregate supply. 
B) decrease the quantity of RGDP supplied, but not decrease short-run aggregate supply. 
C) increase short-run aggregate supply. 
D) decrease short-run aggregate supply. 
A) increase the quantity of RGDP supplied, but not increase short-run aggregate supply. 
B) decrease the quantity of RGDP supplied, but not decrease short-run aggregate supply. 
C) increase short-run aggregate supply. 
D) decrease short-run aggregate supply.

Question 12

The aggregate demand curve portrays the relationship between price level and real GDP.What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

Accepted Answer

The three complementary explanations for

Question 13

Which of the following does not explain why the aggregate demand curve is negatively sloped?

Accepted Answer

A) misperception effect 
B) open economy effect 
C) real wealth effect 
D) interest rate effect 
A) misperception effect 
B) open economy effect 
C) real wealth effect 
D) interest rate effect

Question 14

An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand?

Accepted Answer

A) AD would increase. 
B) AD would decrease. 
C) AD would stay the same. 
D) AD could either increase or decrease, depending on which change was of a greater magnitude. 
A) AD would increase. 
B) AD would decrease. 
C) AD would stay the same. 
D) AD could either increase or decrease, depending on which change was of a greater magnitude.

Question 15

The formula for calculating real GDP = (price index/nominal GDP) x 100.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following will cause consumption, and as a result, aggregate demand, to decrease?

Accepted Answer

A) a tax cut 
B) a fall in consumer confidence 
C) increased population 
D) an optimistic forecast of future income growth 
A) a tax cut 
B) a fall in consumer confidence 
C) increased population 
D) an optimistic forecast of future income growth

Question 17

What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

Accepted Answer

Global markets have become increasingly

Question 18

If exports and imports both rose, but exports rose more than imports,

Accepted Answer

A) AD would fall. 
B) AD would rise. 
C) AD would be unaffected. 
D) AD could either increase or decrease. 
A) AD would fall. 
B) AD would rise. 
C) AD would be unaffected. 
D) AD could either increase or decrease.

Question 19

Discuss the impact of efficiency wages on unemployment and wage inflexibility.

Accepted Answer

Because the efficiency wage rate is grea

Question 20

As the price level increases, households and firms holdings of money ____, interest rates ____, investments ____, and the quantity RGDP demanded ____.

Accepted Answer

A) increases, decrease, increase, decreases 
B) increases, increase, increase, decreases 
C) decreases, decrease, decrease, increases 
D) decreases, decrease, increase, increases 
E) increases, increase, decrease, decreases 
A) increases, decrease, increase, decreases 
B) increases, increase, increase, decreases 
C) decreases, decrease, decrease, increases 
D) decreases, decrease, increase, increases 
E) increases, increase, decrease, decreases

Cost-push inflation is caused by:

Any permanent change in the quantity of any factor of production available - capital, technology, land, or labor - can cause a shift in both the long-run and short-run aggregate supply curves.

Which of the following do not increase U.S.aggregate demand?

If wheat prices rose by 12 percent when producers thought other prices were rising by 15 percent,

As savings grow in an economy, economic growth rises.

Greater and more extensive government regulations of safety standards and environmental controls will have what effect on short-run and long-run aggregate supply?

Discuss some of the reasons behind downward stickiness of wages and prices.

The SRAS curve is vertical at the natural level of real output.

If some non-price level determinant causes total spending to decrease, then the effect on aggregate demand will be a:

An increase in disposable income would tend to shift aggregate demand right.

A decrease in the price level will:

The aggregate demand curve portrays the relationship between price level and real GDP.What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

Which of the following does not explain why the aggregate demand curve is negatively sloped?

An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand?

The formula for calculating real GDP = (price index/nominal GDP) x 100.

Which of the following will cause consumption, and as a result, aggregate demand, to decrease?

What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

If exports and imports both rose, but exports rose more than imports,

Discuss the impact of efficiency wages on unemployment and wage inflexibility.

As the price level increases, households and firms holdings of money , interest rates , investments , and the quantity RGDP demanded .

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

Exam 13: Aggregate Demand and Aggregate Supply

Cost-push inflation is caused by:

Any permanent change in the quantity of any factor of production available - capital, technology, land, or labor - can cause a shift in both the long-run and short-run aggregate supply curves.

Which of the following do not increase U.S.aggregate demand?

If wheat prices rose by 12 percent when producers thought other prices were rising by 15 percent,

As savings grow in an economy, economic growth rises.

Greater and more extensive government regulations of safety standards and environmental controls will have what effect on short-run and long-run aggregate supply?

Discuss some of the reasons behind downward stickiness of wages and prices.

The SRAS curve is vertical at the natural level of real output.

If some non-price level determinant causes total spending to decrease, then the effect on aggregate demand will be a:

An increase in disposable income would tend to shift aggregate demand right.

A decrease in the price level will:

The aggregate demand curve portrays the relationship between price level and real GDP.What are the three reasons this relationship is a negative or inverse relationship? Provide brief illustrations of each.

Which of the following does not explain why the aggregate demand curve is negatively sloped?

An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand?

The formula for calculating real GDP = (price index/nominal GDP) x 100.

Which of the following will cause consumption, and as a result, aggregate demand, to decrease?

What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

If exports and imports both rose, but exports rose more than imports,

Discuss the impact of efficiency wages on unemployment and wage inflexibility.

As the price level increases, households and firms holdings of money ____, interest rates ____, investments ____, and the quantity RGDP demanded ____.

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

As the price level increases, households and firms holdings of money , interest rates , investments , and the quantity RGDP demanded .