Question 1

Which of the following would lead to stagflation?

Accepted Answer

A) demand-pull inflation 
B) cost-push inflation 
C) both of the above 
D) none of the above 
A) demand-pull inflation 
B) cost-push inflation 
C) both of the above 
D) none of the above

Question 2

Ceteris paribus, which of the following would cause the aggregate demand curve to shift to the right?

Accepted Answer

A) higher personal taxes 
B) a rise in consumer confidence 
C) reduced stock market wealth 
D) a reduction in transfer payments 
A) higher personal taxes 
B) a rise in consumer confidence 
C) reduced stock market wealth 
D) a reduction in transfer payments

Question 3

It is impossible to have economic growth unless a country or a region has abundant natural resources to sustain the growth.

Accepted Answer

A) True 
 B)False

Question 4

Demand-pull inflation is caused by:

Accepted Answer

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

Question 5

Which of the following is true of the long-run aggregate supply curve?

Accepted Answer

A) It is vertical. 
B) The level of RGDP supplied does not change as the price level changes. 
C) The level of RGDP supplied changes with the levels of capital, land, labor, and technology available to the economy. 
D) Sometimes the LRAS also shifts when the SRAS shifts, and sometimes it does not. 
E) All of the above are true of the long-run aggregate supply curve. 
A) It is vertical. 
B) The level of RGDP supplied does not change as the price level changes. 
C) The level of RGDP supplied changes with the levels of capital, land, labor, and technology available to the economy. 
D) Sometimes the LRAS also shifts when the SRAS shifts, and sometimes it does not. 
E) All of the above are true of the long-run aggregate supply curve.

Question 6

Economists generally define economic growth as an increase in real output per capita.

Accepted Answer

A) True 
 B)False

Question 7

During the 1970s, U.S.prices generally rose faster than prices in other parts of the world.Which of the following changes would the Open Economy Effect predict took place in response to these price level changes?

Accepted Answer

A) Americans reduced the proportion of foreign goods bought since their foreign prices became relatively lower. 
B) Americans reduced the amount of investment they undertook because interest rates increased. 
C) Americans reduced the amount of goods and services they wanted to purchase for consumption because they felt less wealthy. 
D) Americans reduced the fraction of purchases they made from domestic producers of goods and services since foreign prices became relatively lower. 
A) Americans reduced the proportion of foreign goods bought since their foreign prices became relatively lower. 
B) Americans reduced the amount of investment they undertook because interest rates increased. 
C) Americans reduced the amount of goods and services they wanted to purchase for consumption because they felt less wealthy. 
D) Americans reduced the fraction of purchases they made from domestic producers of goods and services since foreign prices became relatively lower.

Question 8

Does the political freedom existing in democracies always aid economic growth?

Accepted Answer

It is claimed that economic growth stimu

Question 9

An increase 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 10

The quantity of RGDP supplied will decrease in both the short run and long run when the price level falls.

Accepted Answer

A) True 
 B)False

Question 11

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

Accepted Answer

If the demand for consumption goods decr

Question 12

Explain why an increase in income from transactions in factors markets likely increases the demand for goods and services in product markets?

Accepted Answer

Each of us sells his or her sk

Question 13

If both imports and exports fell,

Accepted Answer

A) AD would fall. 
B) AD would rise. 
C) AD would be unaffected. 
D) AD would rise if exports fell more than imports. 
E) AD would fall if exports fell more than imports. 
A) AD would fall. 
B) AD would rise. 
C) AD would be unaffected. 
D) AD would rise if exports fell more than imports. 
E) AD would fall if exports fell more than imports.

Question 14

Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years.

Accepted Answer

A) True 
 B)False

Question 15

Inflation that causes an increase in the prices of goods and services will, other things being equal, tend to decrease nominal GDP.

Accepted Answer

A) True 
 B)False

Question 16

If the price level in the United States decreases, domestic goods will become relatively cheaper than foreign goods, the demand for U.S.-made goods will increase, and the U.S.aggregate demand curve will shift to the right.

Accepted Answer

A) True 
 B)False

Question 17

If the overall price level decreases, then the aggregate demand curve will shift to the right.

Accepted Answer

A) True 
 B)False

Question 18

When the price of cotton has risen 12 percent, the misperception effect could lead cotton producers to increase their output when they otherwise would not, if overall prices:

Accepted Answer

A) have been stable 
B) have risen 4 percent. 
C) have risen 12 percent. 
D) have risen 20 percent. 
E) have risen either 12 percent or 20 percent. 
A) have been stable 
B) have risen 4 percent. 
C) have risen 12 percent. 
D) have risen 20 percent. 
E) have risen either 12 percent or 20 percent.

Question 19

The aggregate supply curve is drawn with:

Accepted Answer

A) the price level on the vertical axis and real GDP on the horizontal. 
B) the price level on the vertical axis and nominal GDP on the horizontal. 
C) nominal GDP on the vertical axis and real GDP on the horizontal. 
D) real GDP on the horizontal axis and the rate of unemployment on the vertical. 
A) the price level on the vertical axis and real GDP on the horizontal. 
B) the price level on the vertical axis and nominal GDP on the horizontal. 
C) nominal GDP on the vertical axis and real GDP on the horizontal. 
D) real GDP on the horizontal axis and the rate of unemployment on the vertical.

Question 20

The flour used in the pizza you bought for dinner last night is considered a final good.

Accepted Answer

A) True 
 B)False

Which of the following would lead to stagflation?

Ceteris paribus, which of the following would cause the aggregate demand curve to shift to the right?

It is impossible to have economic growth unless a country or a region has abundant natural resources to sustain the growth.

Demand-pull inflation is caused by:

Which of the following is true of the long-run aggregate supply curve?

Economists generally define economic growth as an increase in real output per capita.

During the 1970s, U.S.prices generally rose faster than prices in other parts of the world.Which of the following changes would the Open Economy Effect predict took place in response to these price level changes?

Does the political freedom existing in democracies always aid economic growth?

An increase in the price level will:

The quantity of RGDP supplied will decrease in both the short run and long run when the price level falls.

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

Explain why an increase in income from transactions in factors markets likely increases the demand for goods and services in product markets?

If both imports and exports fell,

Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years.

Inflation that causes an increase in the prices of goods and services will, other things being equal, tend to decrease nominal GDP.

If the price level in the United States decreases, domestic goods will become relatively cheaper than foreign goods, the demand for U.S.-made goods will increase, and the U.S.aggregate demand curve will shift to the right.

If the overall price level decreases, then the aggregate demand curve will shift to the right.

When the price of cotton has risen 12 percent, the misperception effect could lead cotton producers to increase their output when they otherwise would not, if overall prices:

The aggregate supply curve is drawn with:

The flour used in the pizza you bought for dinner last night is considered a final good.

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

Which of the following would lead to stagflation?

Ceteris paribus, which of the following would cause the aggregate demand curve to shift to the right?

It is impossible to have economic growth unless a country or a region has abundant natural resources to sustain the growth.

Demand-pull inflation is caused by:

Which of the following is true of the long-run aggregate supply curve?

Economists generally define economic growth as an increase in real output per capita.

During the 1970s, U.S.prices generally rose faster than prices in other parts of the world.Which of the following changes would the Open Economy Effect predict took place in response to these price level changes?

Does the political freedom existing in democracies always aid economic growth?

An increase in the price level will:

The quantity of RGDP supplied will decrease in both the short run and long run when the price level falls.

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

Explain why an increase in income from transactions in factors markets likely increases the demand for goods and services in product markets?

If both imports and exports fell,

Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years.

Inflation that causes an increase in the prices of goods and services will, other things being equal, tend to decrease nominal GDP.

If the price level in the United States decreases, domestic goods will become relatively cheaper than foreign goods, the demand for U.S.-made goods will increase, and the U.S.aggregate demand curve will shift to the right.

If the overall price level decreases, then the aggregate demand curve will shift to the right.

When the price of cotton has risen 12 percent, the misperception effect could lead cotton producers to increase their output when they otherwise would not, if overall prices:

The aggregate supply curve is drawn with:

The flour used in the pizza you bought for dinner last night is considered a final good.

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