Question 1

The aggregate demand curve shows

Accepted Answer

A) a direct relationship between changes in the price level and changes in real GDP. 
B) real GDP does not change as the price level changes. 
C) an inverse relationship between the price level and real GDP. 
D) an inverse relationship between changes in the price level and changes in nominal GDP. 
A) a direct relationship between changes in the price level and changes in real GDP. 
B) real GDP does not change as the price level changes. 
C) an inverse relationship between the price level and real GDP. 
D) an inverse relationship between changes in the price level and changes in nominal GDP.

Question 2

Which of the following will cause the long-run aggregate supply curve to shift? I.Changes in technology.
II.Changes in government spending.
III.Changes in the money supply.

Accepted Answer

A) I only 
B) II only 
C) I,II,and III 
D) only I and II 
A) I only 
B) II only 
C) I,II,and III 
D) only I and II

Question 3

Which of the following factors could cause the economy to experience supply-side inflation?

Accepted Answer

A) Increased security about jobs and future income. 
B) Government laws which say that the average work week must be reduced by one hour every year. 
C) Increase the number of immigrants allowed into the country. 
D) Develop new technology to increase productivity. 
A) Increased security about jobs and future income. 
B) Government laws which say that the average work week must be reduced by one hour every year. 
C) Increase the number of immigrants allowed into the country. 
D) Develop new technology to increase productivity.

Question 4

What has caused persistent inflation in the United States?

Accepted Answer

A) The nation's long-run aggregate supply curve has shifted to the left. 
B) Supply-side inflation 
C) A decrease in labor productivity 
D) None of the above 
A) The nation's long-run aggregate supply curve has shifted to the left. 
B) Supply-side inflation 
C) A decrease in labor productivity 
D) None of the above

Question 5

Which of the following is NOT a reason for the slope of the aggregate demand curve?

Accepted Answer

A) The substitution effect 
B) The real balance effect 
C) The interest rate effect 
D) The open-economy effect 
A) The substitution effect 
B) The real balance effect 
C) The interest rate effect 
D) The open-economy effect

Question 6

The interest rate effect that helps explain the slope of the aggregate demand curve arises because

Accepted Answer

A) interest rates and total planned real expenditures are unrelated. 
B) an increase in the price level lead to decreases in interest rates,which induces more borrowing and hence raises planned real expenditures. 
C) an increase in the price level boosts interest rates,which discourages borrowing and hence reduces planned real expenditures. 
D) a decrease in the price level boosts interest rates,which discourages borrowing and hence frees up income for more planned real expenditures. 
A) interest rates and total planned real expenditures are unrelated. 
B) an increase in the price level lead to decreases in interest rates,which induces more borrowing and hence raises planned real expenditures. 
C) an increase in the price level boosts interest rates,which discourages borrowing and hence reduces planned real expenditures. 
D) a decrease in the price level boosts interest rates,which discourages borrowing and hence frees up income for more planned real expenditures.

Question 7

The interest rate effect operates through

Accepted Answer

A) credit markets by changing borrowing costs. 
B) the purchasing power of individuals' checking accounts. 
C) government spending levels. 
D) labor supply. 
A) credit markets by changing borrowing costs. 
B) the purchasing power of individuals' checking accounts. 
C) government spending levels. 
D) labor supply.

Question 8

An increase in the amount of money in circulation would cause a

Accepted Answer

A) shift of the aggregate demand curve to the right. 
B) shift of the aggregate demand curve to the left. 
C) movement up the aggregate demand curve. 
D) movement down the aggregate demand curve. 
A) shift of the aggregate demand curve to the right. 
B) shift of the aggregate demand curve to the left. 
C) movement up the aggregate demand curve. 
D) movement down the aggregate demand curve.

Question 9

An increase in the U.S.price level causes a

Accepted Answer

A) shift of the U.S.aggregate demand curve to the right. 
B) shift of the U.S.aggregate demand curve to the left. 
C) movement up the U.S.aggregate demand curve. 
D) movement down the U.S.aggregate demand curve. 
A) shift of the U.S.aggregate demand curve to the right. 
B) shift of the U.S.aggregate demand curve to the left. 
C) movement up the U.S.aggregate demand curve. 
D) movement down the U.S.aggregate demand curve.

Question 10

The aggregate demand curve gives

Accepted Answer

A) the total amount of real domestic output that will be purchased at each price level. 
B) the total amount of nominal domestic income that will be purchased at each price level. 
C) the total value of nominal GDP in an economy for a year,holding income and technology constant. 
D) the total value of output produced by workers in both foreign and domestic markets at each price level. 
A) the total amount of real domestic output that will be purchased at each price level. 
B) the total amount of nominal domestic income that will be purchased at each price level. 
C) the total value of nominal GDP in an economy for a year,holding income and technology constant. 
D) the total value of output produced by workers in both foreign and domestic markets at each price level.

The aggregate demand curve shows

Which of the following will cause the long-run aggregate supply curve to shift? I.Changes in technology. II.Changes in government spending. III.Changes in the money supply.

Which of the following factors could cause the economy to experience supply-side inflation?

What has caused persistent inflation in the United States?

Which of the following is NOT a reason for the slope of the aggregate demand curve?

The interest rate effect that helps explain the slope of the aggregate demand curve arises because

The interest rate effect operates through

An increase in the amount of money in circulation would cause a

An increase in the U.S.price level causes a

The aggregate demand curve gives

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

The aggregate demand curve shows

Which of the following will cause the long-run aggregate supply curve to shift? I.Changes in technology. II.Changes in government spending. III.Changes in the money supply.

Which of the following factors could cause the economy to experience supply-side inflation?

What has caused persistent inflation in the United States?

Which of the following is NOT a reason for the slope of the aggregate demand curve?

The interest rate effect that helps explain the slope of the aggregate demand curve arises because

The interest rate effect operates through

An increase in the amount of money in circulation would cause a

An increase in the U.S.price level causes a

The aggregate demand curve gives

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