Question 1

A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as

Accepted Answer

A) demand-side deflation. 
B) the interest rate effect. 
C) secular deflation. 
D) the real balance effect. 
A) demand-side deflation. 
B) the interest rate effect. 
C) secular deflation. 
D) the real balance effect.

Question 2

According to the interest rate effect,a decrease in the price level will

Accepted Answer

A) decrease the real value of money balances,which causes total planned real expenditures to increase. 
B) cause interest rates to fall,which generates an increase in borrowing,so that total planned real expenditures increase. 
C) lead to a decrease in net exports,which causes total planned real expenditures to decrease. 
D) increase the real value of money balances,which causes interest rates to increase,thereby reducing total planned expenditures. 
A) decrease the real value of money balances,which causes total planned real expenditures to increase. 
B) cause interest rates to fall,which generates an increase in borrowing,so that total planned real expenditures increase. 
C) lead to a decrease in net exports,which causes total planned real expenditures to decrease. 
D) increase the real value of money balances,which causes interest rates to increase,thereby reducing total planned expenditures.

Question 3

A human resource such as ingenuity can be thought of as

Accepted Answer

A) a positive for imports. 
B) part of a country's endowment. 
C) part of government spending programs. 
D) a causal factor for aggregate supply shifting left. 
A) a positive for imports. 
B) part of a country's endowment. 
C) part of government spending programs. 
D) a causal factor for aggregate supply shifting left.

Question 4

The long-run aggregate supply curve assumes that

Accepted Answer

A) the unemployment rate is more than 9 percent. 
B) all factors of production are fully employed. 
C) only laborers are fully employed. 
D) there is no government purchasing of goods and services. 
A) the unemployment rate is more than 9 percent. 
B) all factors of production are fully employed. 
C) only laborers are fully employed. 
D) there is no government purchasing of goods and services.

Question 5

Other things being equal,a depreciation of the dollar

Accepted Answer

A) increases aggregate demand in the United States,and may increase aggregate supply by reducing the prices of imported resources. 
B) increases aggregate demand in the United States,and may decrease aggregate supply by increasing the prices of imported resources. 
C) decreases aggregate demand in the United States,and may increase aggregate supply by reducing the prices of imported resources. 
D) decreases aggregate demand in the United States,and may decrease aggregate supply by increasing the prices of imported resources. 
A) increases aggregate demand in the United States,and may increase aggregate supply by reducing the prices of imported resources. 
B) increases aggregate demand in the United States,and may decrease aggregate supply by increasing the prices of imported resources. 
C) decreases aggregate demand in the United States,and may increase aggregate supply by reducing the prices of imported resources. 
D) decreases aggregate demand in the United States,and may decrease aggregate supply by increasing the prices of imported resources.

Question 6

If your income stays the same and the price level increases,you will buy fewer goods and services due to the

Accepted Answer

A) interest rate effect. 
B) real-balance effect. 
C) open economy effect. 
D) aggregate balances effect. 
A) interest rate effect. 
B) real-balance effect. 
C) open economy effect. 
D) aggregate balances effect.

Question 7

If other factors are held constant,an increase in the price level

Accepted Answer

A) causes desired net export spending to rise. 
B) causes desired net export spending to fall. 
C) causes the real value of the money to increase. 
D) induces people to spend their money faster. 
A) causes desired net export spending to rise. 
B) causes desired net export spending to fall. 
C) causes the real value of the money to increase. 
D) induces people to spend their money faster.

Question 8

How is economic growth graphically depicted?

Accepted Answer

A) The aggregate demand curve shifts to the left. 
B) Aggregate demand shifts to the right. 
C) Short-run aggregate supply shifts left. 
D) The long-run aggregate supply curve shifts right. 
A) The aggregate demand curve shifts to the left. 
B) Aggregate demand shifts to the right. 
C) Short-run aggregate supply shifts left. 
D) The long-run aggregate supply curve shifts right.

Question 9

Long-run aggregate supply and a country's production possibility curve (PPC)

Accepted Answer

A) are closely related. 
B) are inversely related. 
C) have no relationship. 
D) are examples of microeconomic models. 
A) are closely related. 
B) are inversely related. 
C) have no relationship. 
D) are examples of microeconomic models.

Question 10

When prices increase,the real interest rate

Accepted Answer

A) will increase and total planned spending on goods and services will increase. 
B) will increase and total planned spending on goods and services will decrease. 
C) will decrease and total planned spending on goods and services will decrease. 
D) will not be affected. 
A) will increase and total planned spending on goods and services will increase. 
B) will increase and total planned spending on goods and services will decrease. 
C) will decrease and total planned spending on goods and services will decrease. 
D) will not be affected.

Question 11

The full-employment and full-adjustment level of real Gross Domestic Product (GDP)in the economy is represented by

Accepted Answer

A) the LRAS curve. 
B) the horizontal line at the price level. 
C) the AD curve. 
D) the distance between the LRAS curve and the AD curve. 
A) the LRAS curve. 
B) the horizontal line at the price level. 
C) the AD curve. 
D) the distance between the LRAS curve and the AD curve.

Question 12

The aggregate demand curve is

Accepted Answer

A) downward sloping. 
B) vertical. 
C) horizontal. 
D) U shaped. 
A) downward sloping. 
B) vertical. 
C) horizontal. 
D) U shaped.

Question 13

The open economy effect refers to the fact that

Accepted Answer

A) the position and shape of the long run aggregate supply curve is partially due to the fact that we import goods. 
B) the aggregate supply curve shifts when the economy grows. 
C) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S.goods by U.S.residents and foreign residents as a result of a higher price level. 
D) the immigration policies of the United States are disruptive to labor markets. 
A) the position and shape of the long run aggregate supply curve is partially due to the fact that we import goods. 
B) the aggregate supply curve shifts when the economy grows. 
C) the slope of the aggregate demand curve is partially explained by the reduction in the desire to buy fewer U.S.goods by U.S.residents and foreign residents as a result of a higher price level. 
D) the immigration policies of the United States are disruptive to labor markets.

Question 14

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

Accepted Answer

A) supply-side inflation. 
B) monetary stagflation. 
C) demand-side inflation. 
D) aggregate supply shock. 
A) supply-side inflation. 
B) monetary stagflation. 
C) demand-side inflation. 
D) aggregate supply shock.

Question 15

The natural rate of unemployment will help determine

Accepted Answer

A) the open economy effect. 
B) the position of the long-run aggregate supply curve. 
C) the level of economic growth in the economy. 
D) low levels of inflation. 
A) the open economy effect. 
B) the position of the long-run aggregate supply curve. 
C) the level of economic growth in the economy. 
D) low levels of inflation.

Question 16

An aggregate demand curve

Accepted Answer

A) shifts to the right when a non-price level change increases total planned real expenditures. 
B) shifts to the right when a non-price level change decreases total planned real expenditures. 
C) shifts to the right when the price level falls. 
D) does not shift to the right or to the left. 
A) shifts to the right when a non-price level change increases total planned real expenditures. 
B) shifts to the right when a non-price level change decreases total planned real expenditures. 
C) shifts to the right when the price level falls. 
D) does not shift to the right or to the left.

Question 17

The long-run aggregate supply curve

Accepted Answer

A) shows that at higher prices,potential real Gross Domestic Product (GDP)increases. 
B) slopes up and to the right. 
C) shows that long-run aggregate supply equals potential real Gross Domestic Product (GDP). 
D) is very sensitive to changes in the price level. 
A) shows that at higher prices,potential real Gross Domestic Product (GDP)increases. 
B) slopes up and to the right. 
C) shows that long-run aggregate supply equals potential real Gross Domestic Product (GDP). 
D) is very sensitive to changes in the price level.

Question 18

If aggregate demand is stable and there is economic growth,the economy will experience

Accepted Answer

A) secular degeneration. 
B) secular deflation. 
C) secular decline. 
D) secular depreciation. 
A) secular degeneration. 
B) secular deflation. 
C) secular decline. 
D) secular depreciation.

Question 19

How does aggregate demand curve (AD)differ from an individual demand curve (D)?

Accepted Answer

A) AD is generally vertical while D is usually downward sloping. 
B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system. 
C) Look for D in macroeconomic analyses and for AD in microeconomics. 
D) AD is generally a downward sloping curve while D usually slopes upward. 
A) AD is generally vertical while D is usually downward sloping. 
B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system. 
C) Look for D in macroeconomic analyses and for AD in microeconomics. 
D) AD is generally a downward sloping curve while D usually slopes upward.

Question 20

Which of the following is a factor that determines the shape of the aggregate demand curve?

Accepted Answer

A) The real-balance effect 
B) The nominal-balance effect 
C) The price level effect 
D) The wage effect 
A) The real-balance effect 
B) The nominal-balance effect 
C) The price level effect 
D) The wage effect

A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as

According to the interest rate effect,a decrease in the price level will

A human resource such as ingenuity can be thought of as

The long-run aggregate supply curve assumes that

Other things being equal,a depreciation of the dollar

If your income stays the same and the price level increases,you will buy fewer goods and services due to the

If other factors are held constant,an increase in the price level

How is economic growth graphically depicted?

Long-run aggregate supply and a country's production possibility curve (PPC)

When prices increase,the real interest rate

The full-employment and full-adjustment level of real Gross Domestic Product (GDP)in the economy is represented by

The aggregate demand curve is

The open economy effect refers to the fact that

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

The natural rate of unemployment will help determine

An aggregate demand curve

The long-run aggregate supply curve

If aggregate demand is stable and there is economic growth,the economy will experience

How does aggregate demand curve (AD)differ from an individual demand curve (D)?

Which of the following is a factor that determines the shape of the aggregate demand curve?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 10: Real GDP and the Price Level in the Long Run

A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as

According to the interest rate effect,a decrease in the price level will

A human resource such as ingenuity can be thought of as

The long-run aggregate supply curve assumes that

Other things being equal,a depreciation of the dollar

If your income stays the same and the price level increases,you will buy fewer goods and services due to the

If other factors are held constant,an increase in the price level

How is economic growth graphically depicted?

Long-run aggregate supply and a country's production possibility curve (PPC)

When prices increase,the real interest rate

The full-employment and full-adjustment level of real Gross Domestic Product (GDP)in the economy is represented by

The aggregate demand curve is

The open economy effect refers to the fact that

Whenever the general level of prices rises because of continual increases in aggregate demand,we say that the economy is experiencing

The natural rate of unemployment will help determine

An aggregate demand curve

The long-run aggregate supply curve

If aggregate demand is stable and there is economic growth,the economy will experience

How does aggregate demand curve (AD)differ from an individual demand curve (D)?

Which of the following is a factor that determines the shape of the aggregate demand curve?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters