Question 1

If an economy is at its potential output level,which of the following is not true?

Accepted Answer

A) The economy is at its full-employment output level. 
B) Unemployment is at the natural level. 
C) The price level is zero. 
D) The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E) The only unemployment is frictional,structural,or seasonal. 
A) The economy is at its full-employment output level. 
B) Unemployment is at the natural level. 
C) The price level is zero. 
D) The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E) The only unemployment is frictional,structural,or seasonal.

Question 2

If the expected price level exceeds the actual price level,then

Accepted Answer

A) potential output falls 
B) real GDP may fall below potential output 
C) potential output increases 
D) nominal wages increase 
E) the inflation rate accelerates 
A) potential output falls 
B) real GDP may fall below potential output 
C) potential output increases 
D) nominal wages increase 
E) the inflation rate accelerates

Question 3

Exhibit 10-9  
-The graph in Exhibit 10-9 shows a(n)

Accepted Answer

A) increase in short-run aggregate supply 
B) increase in long-run aggregate supply 
C) decrease in short-run aggregate supply 
D) decrease in long-run aggregate supply 
E) decrease in aggregate quantity demanded 
A) increase in short-run aggregate supply 
B) increase in long-run aggregate supply 
C) decrease in short-run aggregate supply 
D) decrease in long-run aggregate supply 
E) decrease in aggregate quantity demanded

Question 4

If the economy were at its potential output level,which of the following is not true?

Accepted Answer

A) The actual unemployment rate would equal the natural rate. 
B) There would be some cyclical unemployment. 
C) There would be some seasonal unemployment. 
D) There would be some frictional unemployment. 
E) There would be some structural unemployment. 
A) The actual unemployment rate would equal the natural rate. 
B) There would be some cyclical unemployment. 
C) There would be some seasonal unemployment. 
D) There would be some frictional unemployment. 
E) There would be some structural unemployment.

Question 5

During a recession,

Accepted Answer

A) unemployment is below the natural rate 
B) actual output is above potential output 
C) both unemployment and the price level are too high 
D) contractionary gaps may persist if wages are not very flexible 
E) expansionary gaps may persist if wages are not very flexible 
A) unemployment is below the natural rate 
B) actual output is above potential output 
C) both unemployment and the price level are too high 
D) contractionary gaps may persist if wages are not very flexible 
E) expansionary gaps may persist if wages are not very flexible

Question 6

A wage rate above what is necessary to attract a sufficient number of workers is known as a(n)

Accepted Answer

A) inefficient wage 
B) market-clearing wage 
C) efficiency wage 
D) marginal productivity wage 
E) minimum wage 
A) inefficient wage 
B) market-clearing wage 
C) efficiency wage 
D) marginal productivity wage 
E) minimum wage

Question 7

Beneficial supply shocks include all of the following except one.Which is the exception?

Accepted Answer

A) an abundant harvest that increases food supplies 
B) discoveries of natural resources 
C) changes in legislation favorable to production 
D) technological advances 
E) establishment of the Occupational Safety and Health Administration (OSH
A)  
A) an abundant harvest that increases food supplies 
B) discoveries of natural resources 
C) changes in legislation favorable to production 
D) technological advances 
E) establishment of the Occupational Safety and Health Administration (OSH
A)

Question 8

In constructing a short-run aggregate supply curve,we assume that the goal of business is to

Accepted Answer

A) maximize sales revenue 
B) maximize profit 
C) maximize growth in assets 
D) maximize growth in sales 
E) minimize cost 
A) maximize sales revenue 
B) maximize profit 
C) maximize growth in assets 
D) maximize growth in sales 
E) minimize cost

Question 9

A nominal wage is

Accepted Answer

A) not above the legal minimum 
B) always above the legal minimum 
C) measured in terms of goods and services it can buy 
D) measured in current dollars rather than in constant dollars 
E) measured in constant dollars rather than in current dollars 
A) not above the legal minimum 
B) always above the legal minimum 
C) measured in terms of goods and services it can buy 
D) measured in current dollars rather than in constant dollars 
E) measured in constant dollars rather than in current dollars

Question 10

Whether aggregate supply shifts quickly or slowly to restore equilibrium at potential output depends crucially on

Accepted Answer

A) how quickly planned investment spending adjusts to changes in population growth 
B) how quickly planned consumption spending adjusts to changes in the price level and nominal wages 
C) how quickly technology changes to increase aggregate supply 
D) whether the economy is experiencing a contractionary gap or an expansionary gap 
E) how quickly real wages adjust to restore full employment in the labor market 
A) how quickly planned investment spending adjusts to changes in population growth 
B) how quickly planned consumption spending adjusts to changes in the price level and nominal wages 
C) how quickly technology changes to increase aggregate supply 
D) whether the economy is experiencing a contractionary gap or an expansionary gap 
E) how quickly real wages adjust to restore full employment in the labor market

Question 11

An expansionary gap is closed in the long run by a(n)

Accepted Answer

A) rightward shift of the short-run aggregate supply curve 
B) leftward shift of the short-run aggregate supply curve 
C) movement to the right along a fixed short-run aggregate supply curve 
D) increase in aggregate demand 
E) decrease in aggregate demand 
A) rightward shift of the short-run aggregate supply curve 
B) leftward shift of the short-run aggregate supply curve 
C) movement to the right along a fixed short-run aggregate supply curve 
D) increase in aggregate demand 
E) decrease in aggregate demand

If an economy is at its potential output level,which of the following is not true?

If the expected price level exceeds the actual price level,then

Exhibit 10-9 -The graph in Exhibit 10-9 shows a(n)

If the economy were at its potential output level,which of the following is not true?

During a recession,

A wage rate above what is necessary to attract a sufficient number of workers is known as a(n)

Beneficial supply shocks include all of the following except one.Which is the exception?

In constructing a short-run aggregate supply curve,we assume that the goal of business is to

A nominal wage is

Whether aggregate supply shifts quickly or slowly to restore equilibrium at potential output depends crucially on

An expansionary gap is closed in the long run by a(n)

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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Exam 11: Aggregate Supply

If an economy is at its potential output level,which of the following is not true?

If the expected price level exceeds the actual price level,then

Exhibit 10-9 -The graph in Exhibit 10-9 shows a(n)

If the economy were at its potential output level,which of the following is not true?

During a recession,

A wage rate above what is necessary to attract a sufficient number of workers is known as a(n)

Beneficial supply shocks include all of the following except one.Which is the exception?

In constructing a short-run aggregate supply curve,we assume that the goal of business is to

A nominal wage is

Whether aggregate supply shifts quickly or slowly to restore equilibrium at potential output depends crucially on

An expansionary gap is closed in the long run by a(n)

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters