Question 1

Which of the following does NOT affect the long-run aggregate supply curve?

Accepted Answer

A) Technology 
B) Production possibilities curve 
C) Endowments of resources 
D) Price level 
A) Technology 
B) Production possibilities curve 
C) Endowments of resources 
D) Price level

Question 2

Which of the following is the most likely explanation for inflation in the United States?

Accepted Answer

A) increases in aggregate supply 
B) decreases in aggregate supply 
C) increases in aggregate demand 
D) decreases in aggregate demand 
A) increases in aggregate supply 
B) decreases in aggregate supply 
C) increases in aggregate demand 
D) decreases in aggregate demand

Question 3

When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve

Accepted Answer

A) there will be no price level change. 
B) there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves. 
C) total planned real expenditures will exceed actual real GDP,and the price level will increase. 
D) total planned real expenditure will be lower than actual real GDP,and the price level will increase. 
A) there will be no price level change. 
B) there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves. 
C) total planned real expenditures will exceed actual real GDP,and the price level will increase. 
D) total planned real expenditure will be lower than actual real GDP,and the price level will increase.

Question 4

The aggregate demand curve will shift to the left if

Accepted Answer

A) people are more optimistic about their future. 
B) a reduction in the price level pushes down borrowing costs. 
C) government expenditures increase. 
D) the national incomes of our trading partners decrease. 
A) people are more optimistic about their future. 
B) a reduction in the price level pushes down borrowing costs. 
C) government expenditures increase. 
D) the national incomes of our trading partners decrease.

Question 5

The total of all planned production for the economy is

Accepted Answer

A) aggregate supply. 
B) aggregate demand. 
C) endowments. 
D) real-balance effect. 
A) aggregate supply. 
B) aggregate demand. 
C) endowments. 
D) real-balance effect.

Question 6

Which of the following would unambiguously generate inflation?

Accepted Answer

A) a decrease in aggregate demand accompanied by an increase in aggregate supply 
B) an increase in aggregate demand accompanied by an increase in aggregate supply 
C) a decrease in aggregate demand accompanied by a decrease in aggregate supply 
D) an increase in aggregate demand accompanied by a decrease in aggregate supply 
A) a decrease in aggregate demand accompanied by an increase in aggregate supply 
B) an increase in aggregate demand accompanied by an increase in aggregate supply 
C) a decrease in aggregate demand accompanied by a decrease in aggregate supply 
D) an increase in aggregate demand accompanied by a decrease in aggregate supply

Question 7

Other things being equal,the economy's aggregate demand curve shows that

Accepted Answer

A) as the price level falls,total planned expenditures fall as well. 
B) a change in the general price level causes the curve to shift. 
C) a change in the general price level causes a change in the quantity of final goods and services purchased. 
D) real Gross Domestic Product (GDP)and the price level are not related. 
A) as the price level falls,total planned expenditures fall as well. 
B) a change in the general price level causes the curve to shift. 
C) a change in the general price level causes a change in the quantity of final goods and services purchased. 
D) real Gross Domestic Product (GDP)and the price level are not related.

Question 8

An increase in U.S.prices relative to Japanese prices will

Accepted Answer

A) increase total planned spending on U.S.goods and services. 
B) increase U.S.imports and decrease U.S.exports. 
C) decrease U.S.imports and increase U.S.exports. 
D) decrease both U.S.exports and imports. 
A) increase total planned spending on U.S.goods and services. 
B) increase U.S.imports and decrease U.S.exports. 
C) decrease U.S.imports and increase U.S.exports. 
D) decrease both U.S.exports and imports.

Question 9

What is measured on the horizontal axis of the aggregate demand/aggregate supply model?

Accepted Answer

A) Prices 
B) Real Gross Domestic Product (GDP) 
C) Real wealth 
D) Nominal income 
A) Prices 
B) Real Gross Domestic Product (GDP) 
C) Real wealth 
D) Nominal income

Question 10

All of the following are components of aggregate demand EXCEPT

Accepted Answer

A) consumption spending. 
B) government purchases. 
C) the level of technology. 
D) net foreign spending on domestic production. 
A) consumption spending. 
B) government purchases. 
C) the level of technology. 
D) net foreign spending on domestic production.

Question 11

Steadily improving improvements in technology,other things being equal,will result in

Accepted Answer

A) no change in the price level and steadily increasing output. 
B) persistent deflation 
C) steadily rising price level (inflation)and steadily increasing output. 
D) a steadily falling price level with no change in output. 
A) no change in the price level and steadily increasing output. 
B) persistent deflation 
C) steadily rising price level (inflation)and steadily increasing output. 
D) a steadily falling price level with no change in output.

Question 12

The long-run aggregate supply curve is vertical because

Accepted Answer

A) the economy has yet to use all its available resources. 
B) the economy has reached its potential real Gross Domestic Product (GDP)and is at full employment. 
C) the economy has contracted. 
D) the economy has large numbers of unemployed. 
A) the economy has yet to use all its available resources. 
B) the economy has reached its potential real Gross Domestic Product (GDP)and is at full employment. 
C) the economy has contracted. 
D) the economy has large numbers of unemployed.

Question 13

Economic growth is demonstrated by the LRAS as it

Accepted Answer

A) shifts to the right. 
B) shifts to the left. 
C) becomes more horizontal. 
D) becomes more vertical. 
A) shifts to the right. 
B) shifts to the left. 
C) becomes more horizontal. 
D) becomes more vertical.

Question 14

The level of real GDP identified by the long-run aggregate supply curve is

Accepted Answer

A) the full-employment level of real GDP. 
B) the level of GDP at which each business firm is experiencing growth in sales. 
C) the level of GDP at which each industry is experiencing growth in sales. 
D) the level of GDP at which no one is below the poverty line. 
A) the full-employment level of real GDP. 
B) the level of GDP at which each business firm is experiencing growth in sales. 
C) the level of GDP at which each industry is experiencing growth in sales. 
D) the level of GDP at which no one is below the poverty line.

Question 15

The real output of the economy under conditions of full employment

Accepted Answer

A) is long-run aggregate supply. 
B) is long-run aggregate demand. 
C) happens only when there is no inflation. 
D) is determined by the real-balance effect. 
A) is long-run aggregate supply. 
B) is long-run aggregate demand. 
C) happens only when there is no inflation. 
D) is determined by the real-balance effect.

Question 16

Aggregate supply

Accepted Answer

A) is the total amount of raw materials available in an economy. 
B) is the overall wealth within an economy. 
C) is the total amount of money circulating in an economy. 
D) is the total of all planned production in an economy. 
A) is the total amount of raw materials available in an economy. 
B) is the overall wealth within an economy. 
C) is the total amount of money circulating in an economy. 
D) is the total of all planned production in an economy.

Question 17

If consumers' confidence in the economy rises,

Accepted Answer

A) aggregate demand will shift leftward and the price level will rise. 
B) aggregate demand will shift leftward and the price level will fall. 
C) aggregate demand will shift rightward and the price level will rise. 
D) aggregate demand will shift rightward and the price level will fall. 
A) aggregate demand will shift leftward and the price level will rise. 
B) aggregate demand will shift leftward and the price level will fall. 
C) aggregate demand will shift rightward and the price level will rise. 
D) aggregate demand will shift rightward and the price level will fall.

Question 18

What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?

Accepted Answer

A) production of capital goods 
B) production of consumer goods 
C) the price level 
D) real GDP 
A) production of capital goods 
B) production of consumer goods 
C) the price level 
D) real GDP

Question 19

The sum of all planned expenditures for the entire economy at each possible price level is

Accepted Answer

A) aggregate supply. 
B) effective demand. 
C) aggregate demand. 
D) actual expenditures by consumers. 
A) aggregate supply. 
B) effective demand. 
C) aggregate demand. 
D) actual expenditures by consumers.

Question 20

In an economy in which aggregate demand is stable and a period of sustained and significant productivity growth occurs,there will be

Accepted Answer

A) secular deflation. 
B) secular inflation. 
C) a constant price level. 
D) a shift of aggregate supply to the left. 
A) secular deflation. 
B) secular inflation. 
C) a constant price level. 
D) a shift of aggregate supply to the left.

Which of the following does NOT affect the long-run aggregate supply curve?

Which of the following is the most likely explanation for inflation in the United States?

When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve

The aggregate demand curve will shift to the left if

The total of all planned production for the economy is

Which of the following would unambiguously generate inflation?

Other things being equal,the economy's aggregate demand curve shows that

An increase in U.S.prices relative to Japanese prices will

What is measured on the horizontal axis of the aggregate demand/aggregate supply model?

All of the following are components of aggregate demand EXCEPT

Steadily improving improvements in technology,other things being equal,will result in

The long-run aggregate supply curve is vertical because

Economic growth is demonstrated by the LRAS as it

The level of real GDP identified by the long-run aggregate supply curve is

The real output of the economy under conditions of full employment

Aggregate supply

If consumers' confidence in the economy rises,

What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?

The sum of all planned expenditures for the entire economy at each possible price level is

In an economy in which aggregate demand is stable and a period of sustained and significant productivity growth occurs,there will be

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

Which of the following does NOT affect the long-run aggregate supply curve?

Which of the following is the most likely explanation for inflation in the United States?

When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve

The aggregate demand curve will shift to the left if

The total of all planned production for the economy is

Which of the following would unambiguously generate inflation?

Other things being equal,the economy's aggregate demand curve shows that

An increase in U.S.prices relative to Japanese prices will

What is measured on the horizontal axis of the aggregate demand/aggregate supply model?

All of the following are components of aggregate demand EXCEPT

Steadily improving improvements in technology,other things being equal,will result in

The long-run aggregate supply curve is vertical because

Economic growth is demonstrated by the LRAS as it

The level of real GDP identified by the long-run aggregate supply curve is

The real output of the economy under conditions of full employment

Aggregate supply

If consumers' confidence in the economy rises,

What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?

The sum of all planned expenditures for the entire economy at each possible price level is

In an economy in which aggregate demand is stable and a period of sustained and significant productivity growth occurs,there will be

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