Exam 11: Macroeconomic Equilibrium: Aggregate Demand and Supply

The degree of responsiveness of aggregate output to a price change declines as the:

Increased household spending reduces aggregate expenditures.

Which of the following is most likely to lead to an economic contraction?

Suppose in Country X, wages of workers are increased in the beginning of a financial year, anticipating high inflation in the economy.However prices remain unchanged during the year.Everything else remaining constant, which of the following will be observed in this economy?

Which of the following is an incorrect statement?

In the long-run, if the economy is operating at the full employment level, the equilibrium level of real GDP is determined solely by the:

A decrease in the relative price of economics textbooks will raise the aggregate quantity of an economy's goods and services demanded.

In 2009, a nation reported total imports worth $250, 000 and total exports worth $225, 000.This implies the nation had net exports worth $25, 000 during this year.

A decrease in the price level will result in:

Which of the following illustrates an optimistic expectation of the people about the economy?

Business cycles are linked to the interaction between:

Other things equal, a decrease in government spending:

A rightward shift in the aggregate supply curve with no change in the aggregate demand curve signals an economic expansion.

If the national output cannot be increased unless the productive capacity or potential GDP increases, the aggregate supply curve is:

If people expect the economy to do well in the future, they will increase their consumption today at every price level.

Which of the following could lead to a decline in aggregate supply?

The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model. Figure 8.3 Consider Figure 8.3.Which of the following is most likely to have led to the movement from point B to point E?

An increase in the real value of assets is associated with a reduction in planned aggregate expenditures.

Which of the following is true of cost-push inflation?

The table given below reports the inflation rate in the U.S.and Canada for two years. Table 8.1 Refer to Table 8.1.Assume the exchange rate is fixed at 1.4 CAD (Canadian dollars)= 1 USD (United States dollars).Between year 1 and year 2, what happens to the U.S.aggregate demand curve?