Question 1

-Refer to the above figures.Which panel(s)represent the effect of a decrease in labor productivity?

Accepted Answer

A) Panel A only. 
B) Panels A and C only. 
C) Panel D only. 
D) Panels B and D only. 
A) Panel A only. 
B) Panels A and C only. 
C) Panel D only. 
D) Panels B and D only.

Question 2

Suppose total planned expenditures equal $14.4 trillion when the value of the price level is 95.If the price level dropped to 90,total planned real expenditures will equal

Accepted Answer

A) less than $14.4 trillion but more than $1 trillion. 
B) less than $14.4 trillion. 
C) more than $14.4 trillion. 
D) $14.4 trillion. 
A) less than $14.4 trillion but more than $1 trillion. 
B) less than $14.4 trillion. 
C) more than $14.4 trillion. 
D) $14.4 trillion.

Question 3

All of the following would shift the LRAS curve to the right EXCEPT

Accepted Answer

A) an increase in the size of the labor force. 
B) a net inflow of human capital. 
C) an increase in the overall price level. 
D) an improvement in technology. 
A) an increase in the size of the labor force. 
B) a net inflow of human capital. 
C) an increase in the overall price level. 
D) an improvement in technology.

Question 4

Over the past several decades,what has been true about inflation in the United States?

Accepted Answer

A) Inflation rates have been consistently negative. 
B) The nation has experienced persistent deflation. 
C) Inflation has been very stable. 
D) Inflation rates have been consistently positive. 
A) Inflation rates have been consistently negative. 
B) The nation has experienced persistent deflation. 
C) Inflation has been very stable. 
D) Inflation rates have been consistently positive.

Question 5

-Consider the above figure.At a price level of 120,

Accepted Answer

A) total planned real expenditures exceed total planned production. 
B) total planned production exceeds total planned expenditures. 
C) prices would fall. 
D) inventories would begin to accumulate. 
A) total planned real expenditures exceed total planned production. 
B) total planned production exceeds total planned expenditures. 
C) prices would fall. 
D) inventories would begin to accumulate.

Question 6

-In the above figure,the long-run equilibrium price level is

Accepted Answer

A) 150. 
B) 130. 
C) 110. 
D) not displayed. 
A) 150. 
B) 130. 
C) 110. 
D) not displayed.

Question 7

Long-run aggregate supply is

Accepted Answer

A) the possible combinations of real GDP and inputs after full adjustments have been made. 
B) the extraction of natural resources. 
C) the real production of goods and services after full adjustments have been made. 
D) all of the physical and human resources in the economy. 
A) the possible combinations of real GDP and inputs after full adjustments have been made. 
B) the extraction of natural resources. 
C) the real production of goods and services after full adjustments have been made. 
D) all of the physical and human resources in the economy.

Question 8

Economic growth can be thought of as

Accepted Answer

A) an increase in the price level. 
B) a decrease in the price level. 
C) an increase in long-run aggregate supply. 
D) an increase in aggregate demand. 
A) an increase in the price level. 
B) a decrease in the price level. 
C) an increase in long-run aggregate supply. 
D) an increase in aggregate demand.

Question 9

Long-run aggregate supply reflects

Accepted Answer

A) total production in the economy at full employment. 
B) total spending in the economy at full employment. 
C) both production and spending in the economy. 
D) only foreign production from U.S.subsidiaries. 
A) total production in the economy at full employment. 
B) total spending in the economy at full employment. 
C) both production and spending in the economy. 
D) only foreign production from U.S.subsidiaries.

Question 10

The long-run aggregate supply curve is

Accepted Answer

A) horizontal at the full-employment level of real Gross Domestic Product (GDP). 
B) vertical at the full-employment level of real Gross Domestic Product (GDP). 
C) sloping upward due to the effects of price level changes on real Gross Domestic Product (GDP). 
D) the same as the short run aggregate supply (SRAS)curve. 
A) horizontal at the full-employment level of real Gross Domestic Product (GDP). 
B) vertical at the full-employment level of real Gross Domestic Product (GDP). 
C) sloping upward due to the effects of price level changes on real Gross Domestic Product (GDP). 
D) the same as the short run aggregate supply (SRAS)curve.

Question 11

The aggregate demand curve shows the

Accepted Answer

A) total amount of planned expenditures on goods and services at each possible price level. 
B) total amount of nominal goods that the participants in the economy want to purchase. 
C) total amount of real goods that foreigners want to purchase. 
D) amount of goods producers will produce as production costs fall. 
A) total amount of planned expenditures on goods and services at each possible price level. 
B) total amount of nominal goods that the participants in the economy want to purchase. 
C) total amount of real goods that foreigners want to purchase. 
D) amount of goods producers will produce as production costs fall.

Question 12

When the relative prices of U.S.-manufactured goods go up,the result is

Accepted Answer

A) an increase in exports. 
B) a decrease in exports. 
C) a decrease in imports. 
D) no net change in imports or exports. 
A) an increase in exports. 
B) a decrease in exports. 
C) a decrease in imports. 
D) no net change in imports or exports.

Question 13

Other things being equal,appreciation 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 reducing 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 reducing 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 14

-In the above figure,a movement from point B to point C could be explained by

Accepted Answer

A) an increase in the price level. 
B) a decrease in the quantity of money in circulation. 
C) increased government spending. 
D) the real-balance effect. 
A) an increase in the price level. 
B) a decrease in the quantity of money in circulation. 
C) increased government spending. 
D) the real-balance effect.

Question 15

One reason that the aggregate demand curve slopes downward is because

Accepted Answer

A) higher price levels increase real wealth and consumption. 
B) higher price levels reduce net exports. 
C) higher price levels reduce interest rates. 
D) higher price levels increase investment. 
A) higher price levels increase real wealth and consumption. 
B) higher price levels reduce net exports. 
C) higher price levels reduce interest rates. 
D) higher price levels increase investment.

Question 16

The aggregate demand curve

Accepted Answer

A) is vertical at the full-employment level of output. 
B) is horizontal at the full-employment level of output. 
C) is downward sloping. 
D) is upward sloping. 
A) is vertical at the full-employment level of output. 
B) is horizontal at the full-employment level of output. 
C) is downward sloping. 
D) is upward sloping.

Question 17

A decrease in U.S.prices relative to European prices

Accepted Answer

A) will decrease European exports to the United States. 
B) will increase U.S.imports from Europe. 
C) will decrease U.S.exports to Europe. 
D) will not affect U.S.trade with Europe. 
A) will decrease European exports to the United States. 
B) will increase U.S.imports from Europe. 
C) will decrease U.S.exports to Europe. 
D) will not affect U.S.trade with Europe.

Question 18

An economy experiences real growth over time with stable aggregate demand.This would likely result in

Accepted Answer

A) increasing prices. 
B) decreasing prices. 
C) secular inflation. 
D) increased unemployment. 
A) increasing prices. 
B) decreasing prices. 
C) secular inflation. 
D) increased unemployment.

Question 19

According to the real-balance effect,an increase in the price level will

Accepted Answer

A) leave total planned real expenditures unchanged since the price level of all goods has increased. 
B) decrease total planned real expenditures because of an increase in interest rates. 
C) lead to a corresponding increase in total planned real expenditures since businesses are now earning higher profits. 
D) decrease total planned real expenditures as a result of a decrease in the real value of money balances. 
A) leave total planned real expenditures unchanged since the price level of all goods has increased. 
B) decrease total planned real expenditures because of an increase in interest rates. 
C) lead to a corresponding increase in total planned real expenditures since businesses are now earning higher profits. 
D) decrease total planned real expenditures as a result of a decrease in the real value of money balances.

Question 20

The aggregate supply curve

Accepted Answer

A) shows what each producer is willing and able to produce at each income level. 
B) relates planned aggregate production to price level. 
C) becomes vertical if there is excess production capacity within the economy. 
D) shows a negative relationship between the price level and real Gross Domestic Product (GDP). 
A) shows what each producer is willing and able to produce at each income level. 
B) relates planned aggregate production to price level. 
C) becomes vertical if there is excess production capacity within the economy. 
D) shows a negative relationship between the price level and real Gross Domestic Product (GDP).

-Refer to the above figures.Which panel(s)represent the effect of a decrease in labor productivity?

Suppose total planned expenditures equal $14.4 trillion when the value of the price level is 95.If the price level dropped to 90,total planned real expenditures will equal

All of the following would shift the LRAS curve to the right EXCEPT

Over the past several decades,what has been true about inflation in the United States?

-Consider the above figure.At a price level of 120,

-In the above figure,the long-run equilibrium price level is

Long-run aggregate supply is

Economic growth can be thought of as

Long-run aggregate supply reflects

The long-run aggregate supply curve is

The aggregate demand curve shows the

When the relative prices of U.S.-manufactured goods go up,the result is

Other things being equal,appreciation of the dollar

-In the above figure,a movement from point B to point C could be explained by

One reason that the aggregate demand curve slopes downward is because

The aggregate demand curve

A decrease in U.S.prices relative to European prices

An economy experiences real growth over time with stable aggregate demand.This would likely result in

According to the real-balance effect,an increase in the price level will

The aggregate supply 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

-Refer to the above figures.Which panel(s)represent the effect of a decrease in labor productivity?

Suppose total planned expenditures equal $14.4 trillion when the value of the price level is 95.If the price level dropped to 90,total planned real expenditures will equal

All of the following would shift the LRAS curve to the right EXCEPT

Over the past several decades,what has been true about inflation in the United States?

-Consider the above figure.At a price level of 120,

-In the above figure,the long-run equilibrium price level is

Long-run aggregate supply is

Economic growth can be thought of as

Long-run aggregate supply reflects

The long-run aggregate supply curve is

The aggregate demand curve shows the

When the relative prices of U.S.-manufactured goods go up,the result is

Other things being equal,appreciation of the dollar

-In the above figure,a movement from point B to point C could be explained by

One reason that the aggregate demand curve slopes downward is because

The aggregate demand curve

A decrease in U.S.prices relative to European prices

An economy experiences real growth over time with stable aggregate demand.This would likely result in

According to the real-balance effect,an increase in the price level will

The aggregate supply 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