Question 1

A change in the money supply changes only nominal variables in the long run.

Accepted Answer

A) True 
 B)False

Question 2

The classical dichotomy refers to the separation of

Accepted Answer

A)  prices and nominal interest rates. 
B)  taxes and government spending. 
C)  decisions made by the public and decisions made by the government. 
D)  real and nominal variables. 
A)  prices and nominal interest rates. 
B)  taxes and government spending. 
C)  decisions made by the public and decisions made by the government. 
D)  real and nominal variables.

Question 3

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Accepted Answer

A)  increase which shifts aggregate demand right. 
B)  increase which shifts aggregate demand left. 
C)  decrease which shifts aggregate demand right. 
D)  decrease which shifts aggregate demand left. 
A)  increase which shifts aggregate demand right. 
B)  increase which shifts aggregate demand left. 
C)  decrease which shifts aggregate demand right. 
D)  decrease which shifts aggregate demand left.

Question 4

Figure 33-7.  
-Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Accepted Answer

A)  V. 
B)  W. 
C)  X. 
D)  Z. 
A)  V. 
B)  W. 
C)  X. 
D)  Z.

Question 5

Which of the following shifts short-run, but not long-run aggregate supply right?

Accepted Answer

A)  a decrease in the actual price level 
B)  a decrease in the expected price level 
C)  a decrease in the capital stock 
D)  an increase in the money supply 
A)  a decrease in the actual price level 
B)  a decrease in the expected price level 
C)  a decrease in the capital stock 
D)  an increase in the money supply

Question 6

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

Accepted Answer

A) True 
 B)False

Question 7

Optimism
Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way 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 8

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level), expresses

Accepted Answer

A)  how the long run equilibrium adjusts to changes in money supply. 
B)  how output deviates in the short run from its long run natural rate. 
C)  how the short run aggregate supply curve shifts. 
D)  how adverse shifts in aggregate supply can cause stagflation. 
A)  how the long run equilibrium adjusts to changes in money supply. 
B)  how output deviates in the short run from its long run natural rate. 
C)  how the short run aggregate supply curve shifts. 
D)  how adverse shifts in aggregate supply can cause stagflation.

Question 9

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

Accepted Answer

why the ag

Question 10

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Accepted Answer

Long run e

Question 11

Other things the same, the aggregate quantity of output supplied will increase if the price level

Accepted Answer

A)  is lower than expected so that firms believe the relative price of their output has increased. 
B)  is lower than expected so that firms believe the relative price of their output has decreased. 
C)  is higher than expected so that firms believe the relative price of their output has increased. 
D)  is higher than expected so that firms believe the relative price of their output has decreased. 
A)  is lower than expected so that firms believe the relative price of their output has increased. 
B)  is lower than expected so that firms believe the relative price of their output has decreased. 
C)  is higher than expected so that firms believe the relative price of their output has increased. 
D)  is higher than expected so that firms believe the relative price of their output has decreased.

Question 12

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Accepted Answer

why the short run ag

Question 13

Figure 33-4  
-Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Accepted Answer

A)  stays at A. 
B)  moves to B. 
C)  moves to C. 
D)  moves to D. 
A)  stays at A. 
B)  moves to B. 
C)  moves to C. 
D)  moves to D.

Question 14

Other things the same, the aggregate quantity of goods demanded decreases if

Accepted Answer

A)  real wealth falls. 
B)  the interest rate rises. 
C)  the dollar appreciates. 
D)  All of the above are correct. 
A)  real wealth falls. 
B)  the interest rate rises. 
C)  the dollar appreciates. 
D)  All of the above are correct.

Question 15

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Accepted Answer

A)  the supply of dollars would shift right and the exchange rate would rise. 
B)  the supply of dollars would shift right and the exchange rate would fall. 
C)  the supply of dollars would shift left and the exchange rate would rise. 
D)  None of the above is correct. 
A)  the supply of dollars would shift right and the exchange rate would rise. 
B)  the supply of dollars would shift right and the exchange rate would fall. 
C)  the supply of dollars would shift left and the exchange rate would rise. 
D)  None of the above is correct.

Question 16

Other things the same, technological progress raises the price level.

Accepted Answer

A) True 
 B)False

Question 17

When the dollar depreciates, each dollar buys

Accepted Answer

A)  more foreign currency, and so buys more foreign goods. 
B)  more foreign currency, and so buys fewer foreign goods. 
C)  less foreign currency, and so buys more foreign goods. 
D)  less foreign currency, and so buys fewer foreign goods. 
A)  more foreign currency, and so buys more foreign goods. 
B)  more foreign currency, and so buys fewer foreign goods. 
C)  less foreign currency, and so buys more foreign goods. 
D)  less foreign currency, and so buys fewer foreign goods.

Question 18

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

Accepted Answer

The answer of Who said about classical economic theory: "the...

Question 19

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Accepted Answer

A)  stagflation. 
B)  the classical dichotomy. 
C)  short-run economic fluctuations. 
D)  how changes in the money supply had created the Great Depression. 
A)  stagflation. 
B)  the classical dichotomy. 
C)  short-run economic fluctuations. 
D)  how changes in the money supply had created the Great Depression.

Question 20

Explain how a recession differs from a depression.

Accepted Answer

Recessions are relatively mild

A change in the money supply changes only nominal variables in the long run.

The classical dichotomy refers to the separation of

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Figure 33-7. -Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Which of the following shifts short-run, but not long-run aggregate supply right?

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level), expresses

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Other things the same, the aggregate quantity of output supplied will increase if the price level

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Figure 33-4 -Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Other things the same, the aggregate quantity of goods demanded decreases if

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Other things the same, technological progress raises the price level.

When the dollar depreciates, each dollar buys

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Explain how a recession differs from a depression.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 15: Aggregate Demand and Aggregate Supply

A change in the money supply changes only nominal variables in the long run.

The classical dichotomy refers to the separation of

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports

Figure 33-7. -Refer to Figure 33-7. If the economy starts at Y, then a recession occurs at

Which of the following shifts short-run, but not long-run aggregate supply right?

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

The mathematical equation: quantity of output supplied = natural rate of output + aactual price level - expected price level), expresses

The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?

In the aggregate demand and aggregate supply model, the point where the aggregate demand curve crosses the long run aggregate supply curve, and the expected price level equals the actual price level, is known as what?

Other things the same, the aggregate quantity of output supplied will increase if the price level

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Figure 33-4 -Refer to Figure 33-4. If the economy is at A and there is a fall in aggregate demand, in the short run the economy

Other things the same, the aggregate quantity of goods demanded decreases if

Refer to U.S. Financial Crisis. What would happen in the market for foreign-currency exchange?

Other things the same, technological progress raises the price level.

When the dollar depreciates, each dollar buys

Who said about classical economic theory: "the long run is a misleading guide to current affairs. In the long run we are all dead"?

In 1936, John Maynard Keynes published a book, The General Theory, which attempted to explain

Explain how a recession differs from a depression.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters