Question 1

The total level of all planned expenditures in the economy best describes

Accepted Answer

A) aggregate supply. 
B) aggregate demand. 
C) aggregate expenditures. 
D) both B and C are correct. 
A) aggregate supply. 
B) aggregate demand. 
C) aggregate expenditures. 
D) both B and C are correct.

Question 2

Long-run aggregate supply curve corresponds to

Accepted Answer

A) real GDP when the economy is above full employment. 
B) real GDP when the economy is at full employment. 
C) the economy outside its production possibilities curve. 
D) the economy inside its production possibilities curve. 
A) real GDP when the economy is above full employment. 
B) real GDP when the economy is at full employment. 
C) the economy outside its production possibilities curve. 
D) the economy inside its production possibilities curve.

Question 3

The long-run aggregate supply will increase when

Accepted Answer

A) labor supply decreases. 
B) international trade barriers are removed. 
C) the price level increases. 
D) tax rates increase. 
A) labor supply decreases. 
B) international trade barriers are removed. 
C) the price level increases. 
D) tax rates increase.

Question 4

The intersection of aggregate demand and long-run aggregate supply identify the price level at which total planned

Accepted Answer

A) real expenditures equal actual nominal GDP. 
B) real expenditures equal total planned production. 
C) export spending equals total planned import spending. 
D) government spending equals total planned tax revenues. 
A) real expenditures equal actual nominal GDP. 
B) real expenditures equal total planned production. 
C) export spending equals total planned import spending. 
D) government spending equals total planned tax revenues.

Question 5

Economic growth causes the

Accepted Answer

A) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward. 
B) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift rightward. 
C) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift leftward. 
D) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward. 
A) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward. 
B) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift rightward. 
C) production possibilities curve to shift rightward and the long-run aggregate supply curve to shift leftward. 
D) production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward.

Question 6

If there is persistent inflation,

Accepted Answer

A) long-run aggregate supply is growing at a faster rate than aggregate demand. 
B) long-run aggregate supply is growing at a slower rate than aggregate demand. 
C) there is an excess of total planned expenditures. 
D) long-run aggregate supply is constant. 
A) long-run aggregate supply is growing at a faster rate than aggregate demand. 
B) long-run aggregate supply is growing at a slower rate than aggregate demand. 
C) there is an excess of total planned expenditures. 
D) long-run aggregate supply is constant.

Question 7

The long-run aggregate supply curve will shift to the left when

Accepted Answer

A) population decreases. 
B) the price level increases. 
C) technology improves. 
D) new sources of oil are discovered. 
A) population decreases. 
B) the price level increases. 
C) technology improves. 
D) new sources of oil are discovered.

Question 8

How can a country experience economic growth and stable prices?

Accepted Answer

A country can experience economic growth

Question 9

Aggregate demand is

Accepted Answer

A) the horizontal summation of all demand curves for a product. 
B) the sum of all planned expenditures for the economy. 
C) the total quantity of all goods sold in an economy in a year. 
D) the horizontal summation of all demand curves for state,local,and federal governments and business firms. 
A) the horizontal summation of all demand curves for a product. 
B) the sum of all planned expenditures for the economy. 
C) the total quantity of all goods sold in an economy in a year. 
D) the horizontal summation of all demand curves for state,local,and federal governments and business firms.

Question 10

The wealth effect is another term for the

Accepted Answer

A) substitution effect. 
B) the indirect effect. 
C) the real-balance effect. 
D) the interest rate effect. 
A) substitution effect. 
B) the indirect effect. 
C) the real-balance effect. 
D) the interest rate effect.

Question 11

The aggregate demand curve is

Accepted Answer

A) horizontal if full employment exists in the economy. 
B) vertical if full employment exists in the economy. 
C) downward sloping because of the real-balance,interest rate,and open economy effects. 
D) downward sloping because more goods are produced as per unit cost of producing each item falls. 
A) horizontal if full employment exists in the economy. 
B) vertical if full employment exists in the economy. 
C) downward sloping because of the real-balance,interest rate,and open economy effects. 
D) downward sloping because more goods are produced as per unit cost of producing each item falls.

Question 12

Other things being equal,along an aggregate demand curve,a higher price level is associated with

Accepted Answer

A) a higher real GDP. 
B) a lower real GDP. 
C) a lower nominal GDP. 
D) higher income levels. 
A) a higher real GDP. 
B) a lower real GDP. 
C) a lower nominal GDP. 
D) higher income levels.

Question 13

Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve?

Accepted Answer

A) Increase in labor productivity 
B) Increase in aggregate demand 
C) Increase in capital 
D) Increase in labor 
A) Increase in labor productivity 
B) Increase in aggregate demand 
C) Increase in capital 
D) Increase in labor

Question 14

Economic growth is represented on the aggregate supply model by a

Accepted Answer

A) shift in the long-run aggregate supply curve to the left. 
B) shift in the long-run aggregate supply curve to the right. 
C) shift in the short-run aggregate supply curve to the left. 
D) shift in the short-run aggregate supply curve to the right. 
A) shift in the long-run aggregate supply curve to the left. 
B) shift in the long-run aggregate supply curve to the right. 
C) shift in the short-run aggregate supply curve to the left. 
D) shift in the short-run aggregate supply curve to the right.

Question 15

Which of the following is NOT an explanation for the shape of the aggregate demand curve?

Accepted Answer

A) real balance effect 
B) interest rate effect 
C) open economy effect 
D) investment effect 
A) real balance effect 
B) interest rate effect 
C) open economy effect 
D) investment effect

Question 16

When expenditures change due to changes in the real value of money caused by variations in the price level,this is known as 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 17

The real-balance effect refers to

Accepted Answer

A) the economy's response to interest rate changes. 
B) the change in the value of cash balances due to price level changes. 
C) the change in net exports. 
D) the economy's ability to balance recession and expansion. 
A) the economy's response to interest rate changes. 
B) the change in the value of cash balances due to price level changes. 
C) the change in net exports. 
D) the economy's ability to balance recession and expansion.

Question 18

-Refer to the above figure.Suppose the economy's initial equilibrium is represented by the intersection of LRAS1 and AD1.Suppose there is a persistent reduction in labor force participation,which reduces total planned production at any given price level.The resulting change in the economy's long-run equilibrium position would be represented by a

Accepted Answer

A) movement from A to C. 
B) movement from A to B. 
C) movement from B to C. 
D) movement from C to A. 
A) movement from A to C. 
B) movement from A to B. 
C) movement from B to C. 
D) movement from C to A.

Question 19

In looking back over the past 40 years,which of the following has the U.S.economy experienced?

Accepted Answer

A) Persistent deflation 
B) Consistent inflation at a slow constant rate 
C) Persistent inflation 
D) Years of both inflation and deflation 
A) Persistent deflation 
B) Consistent inflation at a slow constant rate 
C) Persistent inflation 
D) Years of both inflation and deflation

Question 20

Aggregate supply is

Accepted Answer

A) the summation of all product supply curves. 
B) the horizontal summation of all supply curves for services. 
C) the stock of all goods in the economy. 
D) the sum of all planned production in the economy. 
A) the summation of all product supply curves. 
B) the horizontal summation of all supply curves for services. 
C) the stock of all goods in the economy. 
D) the sum of all planned production in the economy.

The total level of all planned expenditures in the economy best describes

Long-run aggregate supply curve corresponds to

The long-run aggregate supply will increase when

The intersection of aggregate demand and long-run aggregate supply identify the price level at which total planned

Economic growth causes the

If there is persistent inflation,

The long-run aggregate supply curve will shift to the left when

How can a country experience economic growth and stable prices?

Aggregate demand is

The wealth effect is another term for the

The aggregate demand curve is

Other things being equal,along an aggregate demand curve,a higher price level is associated with

Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve?

Economic growth is represented on the aggregate supply model by a

Which of the following is NOT an explanation for the shape of the aggregate demand curve?

When expenditures change due to changes in the real value of money caused by variations in the price level,this is known as the

The real-balance effect refers to

In looking back over the past 40 years,which of the following has the U.S.economy experienced?

Aggregate supply is

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 total level of all planned expenditures in the economy best describes

Long-run aggregate supply curve corresponds to

The long-run aggregate supply will increase when

The intersection of aggregate demand and long-run aggregate supply identify the price level at which total planned

Economic growth causes the

If there is persistent inflation,

The long-run aggregate supply curve will shift to the left when

How can a country experience economic growth and stable prices?

Aggregate demand is

The wealth effect is another term for the

The aggregate demand curve is

Other things being equal,along an aggregate demand curve,a higher price level is associated with

Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve?

Economic growth is represented on the aggregate supply model by a

Which of the following is NOT an explanation for the shape of the aggregate demand curve?

When expenditures change due to changes in the real value of money caused by variations in the price level,this is known as the

The real-balance effect refers to

In looking back over the past 40 years,which of the following has the U.S.economy experienced?

Aggregate supply is

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