Question 1

Figure 33-15.  Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Accepted Answer

consumption, investm

Question 2

Figure 33-4  
-Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

Accepted Answer

A)  to A in the long run. 
B)  to C in the long run. 
C)  back to A in the long run. 
D)  to D in the long run. 
A)  to A in the long run. 
B)  to C in the long run. 
C)  back to A in the long run. 
D)  to D in the long run.

Question 3

The effect of an increase in the price level on the aggregate-demand curve is represented by a

Accepted Answer

A)  shift to the right of the aggregate-demand curve. 
B)  shift to the left of the aggregate-demand curve. 
C)  movement to the left along a given aggregate-demand curve. 
D)  movement to the right along a given aggregate-demand curve. 
A)  shift to the right of the aggregate-demand curve. 
B)  shift to the left of the aggregate-demand curve. 
C)  movement to the left along a given aggregate-demand curve. 
D)  movement to the right along a given aggregate-demand curve.

Question 4

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%, then firms have

Accepted Answer

A)  higher than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. 
B)  higher than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied. 
C)  lower than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. 
D)  lower than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied. 
A)  higher than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. 
B)  higher than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied. 
C)  lower than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. 
D)  lower than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied.

Question 5

Figure 33-5.  
-Refer to Figure 33-5. The appearance of the long-run aggregate-supply LRAS) curve

Accepted Answer

A)  is consistent with the concept of monetary neutrality. 
B)  is consistent with the idea that point A represents a long-run equilibrium and a short-run equilibrium when the relevant short-run aggregate-supply curve is SRAS1. 
C)  indicates that Y1 is the natural rate of output. 
D)  All of the above are correct. 
A)  is consistent with the concept of monetary neutrality. 
B)  is consistent with the idea that point A represents a long-run equilibrium and a short-run equilibrium when the relevant short-run aggregate-supply curve is SRAS1. 
C)  indicates that Y1 is the natural rate of output. 
D)  All of the above are correct.

Question 6

Figure 33-10.  
-Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 7

If money is neutral, then changes in the quantity of money

Accepted Answer

A)  do not affect real output. 
B)  affect both nominal and real output 
C)  do not affect nominal output. 
D)  affect neither nominal nor real output. 
A)  do not affect real output. 
B)  affect both nominal and real output 
C)  do not affect nominal output. 
D)  affect neither nominal nor real output.

Question 8

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

Accepted Answer

A)  aggregate supply to the right. 
B)  aggregate supply to the left. 
C)  aggregate demand to the right. 
D)  aggregate demand to the left. 
A)  aggregate supply to the right. 
B)  aggregate supply to the left. 
C)  aggregate demand to the right. 
D)  aggregate demand to the left.

Question 9

The aggregate quantity of goods and services demanded changes as the price level rises because

Accepted Answer

A)  real wealth falls, interest rates rise, and the dollar appreciates. 
B)  real wealth falls, interest rates rise, and the dollar depreciates. 
C)  real wealth rises, interest rates fall, and the dollar appreciates. 
D)  real wealth rises, interest rates fall, and the dollar depreciates. 
A)  real wealth falls, interest rates rise, and the dollar appreciates. 
B)  real wealth falls, interest rates rise, and the dollar depreciates. 
C)  real wealth rises, interest rates fall, and the dollar appreciates. 
D)  real wealth rises, interest rates fall, and the dollar depreciates.

Question 10

When the price level rises unexpectedly, some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production.

Accepted Answer

A) True 
 B)False

Question 11

If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would

Accepted Answer

A)  rise, making aggregate demand shift right. 
B)  rise, making aggregate demand shift left. 
C)  fall, making aggregate demand shift right. 
D)  fall, making aggregate demand shift left. 
A)  rise, making aggregate demand shift right. 
B)  rise, making aggregate demand shift left. 
C)  fall, making aggregate demand shift right. 
D)  fall, making aggregate demand shift left.

Question 12

The long-run aggregate supply curve

Accepted Answer

A)  is vertical. 
B)  is a graphical representation of the classical dichotomy. 
C)  indicates monetary neutrality in the long run. 
D)  All of the above are correct. 
A)  is vertical. 
B)  is a graphical representation of the classical dichotomy. 
C)  indicates monetary neutrality in the long run. 
D)  All of the above are correct.

Question 13

If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then

Accepted Answer

A)  U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. 
B)  U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. 
C)  U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. 
D)  U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left. 
A)  U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. 
B)  U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. 
C)  U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. 
D)  U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left.

Question 14

Other things the same, if the U.S. price level rises, then

Accepted Answer

A)  the supply of dollars in the market for foreign-currency exchange increases, and net exports fall. 
B)  the supply of dollars in the market for foreign-currency exchange increases, and net exports rise. 
C)  the supply of dollars in the market for foreign-currency exchange decreases, and net exports fall. 
D)  the supply of dollars in the market for foreign-currency exchange decreases, and net exports rise. 
A)  the supply of dollars in the market for foreign-currency exchange increases, and net exports fall. 
B)  the supply of dollars in the market for foreign-currency exchange increases, and net exports rise. 
C)  the supply of dollars in the market for foreign-currency exchange decreases, and net exports fall. 
D)  the supply of dollars in the market for foreign-currency exchange decreases, and net exports rise.

Question 15

Other things the same, if technology increases, then in the long run

Accepted Answer

A)  both output and prices are higher. 
B)  output is higher and prices are lower. 
C)  output is lower and prices are higher. 
D)  both output and prices are lower. 
A)  both output and prices are higher. 
B)  output is higher and prices are lower. 
C)  output is lower and prices are higher. 
D)  both output and prices are lower.

Question 16

At a given price level, an increase in which of the following shifts aggregate demand to the right?

Accepted Answer

A)  consumption 
B)  investment 
C)  government expenditures 
D)  All of the above are correct. 
A)  consumption 
B)  investment 
C)  government expenditures 
D)  All of the above are correct.

Question 17

Write the mathematical expression that summarizes the three alternative explanations for the upward slope of the short run aggregate supply curve.

Accepted Answer

Quantity of output s

Question 18

Other things the same, an increase in the amount of capital firms wish to purchase would initially shift

Accepted Answer

A)  aggregate demand right. 
B)  aggregate demand left. 
C)  aggregate supply right. 
D)  aggregate supply left. 
A)  aggregate demand right. 
B)  aggregate demand left. 
C)  aggregate supply right. 
D)  aggregate supply left.

Question 19

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

Accepted Answer

A)  increases by less than expected so that firms believe the relative price of their output has increased. 
B)  increases by less than expected so that firms believe the relative price of their output has decreased. 
C)  increases by more than expected so that firms believe the relative price of their output has increased. 
D)  increases by more than expected so that firms believe the relative price of their output has decreased. 
A)  increases by less than expected so that firms believe the relative price of their output has increased. 
B)  increases by less than expected so that firms believe the relative price of their output has decreased. 
C)  increases by more than expected so that firms believe the relative price of their output has increased. 
D)  increases by more than expected so that firms believe the relative price of their output has decreased.

Question 20

Other things the same, if the price level falls, people

Accepted Answer

A)  increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases. 
B)  increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. 
C)  decrease foreign bond purchases, so the supply of dollars in market for foreign-currency exchange increases. 
D)  decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. 
A)  increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases. 
B)  increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases. 
C)  decrease foreign bond purchases, so the supply of dollars in market for foreign-currency exchange increases. 
D)  decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases.

Figure 33-15. Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Figure 33-4 -Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

The effect of an increase in the price level on the aggregate-demand curve is represented by a

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%, then firms have

Figure 33-5. -Refer to Figure 33-5. The appearance of the long-run aggregate-supply LRAS) curve

Figure 33-10. -Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

If money is neutral, then changes in the quantity of money

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

The aggregate quantity of goods and services demanded changes as the price level rises because

When the price level rises unexpectedly, some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production.

If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would

The long-run aggregate supply curve

If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then

Other things the same, if the U.S. price level rises, then

Other things the same, if technology increases, then in the long run

At a given price level, an increase in which of the following shifts aggregate demand to the right?

Write the mathematical expression that summarizes the three alternative explanations for the upward slope of the short run aggregate supply curve.

Other things the same, an increase in the amount of capital firms wish to purchase would initially shift

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

Other things the same, if the price level falls, people

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

Figure 33-15. Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Figure 33-4 -Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

The effect of an increase in the price level on the aggregate-demand curve is represented by a

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%, then firms have

Figure 33-5. -Refer to Figure 33-5. The appearance of the long-run aggregate-supply LRAS) curve

Figure 33-10. -Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

If money is neutral, then changes in the quantity of money

Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift

The aggregate quantity of goods and services demanded changes as the price level rises because

When the price level rises unexpectedly, some businesses may mistake part of the increase for an increase in the price of their product relative to others and so decrease their production.

If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would

The long-run aggregate supply curve

If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then

Other things the same, if the U.S. price level rises, then

Other things the same, if technology increases, then in the long run

At a given price level, an increase in which of the following shifts aggregate demand to the right?

Write the mathematical expression that summarizes the three alternative explanations for the upward slope of the short run aggregate supply curve.

Other things the same, an increase in the amount of capital firms wish to purchase would initially shift

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

Other things the same, if the price level falls, people

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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