Question 1

What factor changes the quantity of real GDP supplied and results in a movement along the AS curve?

Accepted Answer

Changes in the price level cha

Question 2

The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate.

Accepted Answer

A) upward;rise;rise 
B) downward;fall;rise 
C) upward;rise;fall 
D) upward;fall;fall 
E) downward;rise;rise 
A) upward;rise;rise 
B) downward;fall;rise 
C) upward;rise;fall 
D) upward;fall;fall 
E) downward;rise;rise

Question 3

-The table above gives data for the nation of Pearl,a small island in the South Pacific.If a supply shock decreases the quantity of real GDP supplied by $6 billion at each price level,the new equilibrium real GDP is

Accepted Answer

A) $16 billion. 
B) $19 billion. 
C) $22 billion. 
D) $23 billion. 
E) $17 billion. 
A) $16 billion. 
B) $19 billion. 
C) $22 billion. 
D) $23 billion. 
E) $17 billion.

Question 4

The figure above shows aggregate demand curves.
-Based on the figure above,the aggregate demand curve will shift from AD0 to AD2 when

Accepted Answer

A) potential GDP increases. 
B) the price level falls. 
C) taxes are lowered. 
D) government expenditure increases. 
E) the Federal Reserve raises the interest rate. 
A) potential GDP increases. 
B) the price level falls. 
C) taxes are lowered. 
D) government expenditure increases. 
E) the Federal Reserve raises the interest rate.

Question 5

Over the business cycle,factors such as the quantity of capital,human capital and technology

Accepted Answer

A) grow but do not fluctuate as much as the quantity of labor employed. 
B) change drastically,fluctuating more than the quantity of labor employed. 
C) fluctuate about the same amount as the quantity of labor employed. 
D) do not grow and are therefore not the source of economic growth. 
E) change randomly,sometimes growing,sometimes falling. 
A) grow but do not fluctuate as much as the quantity of labor employed. 
B) change drastically,fluctuating more than the quantity of labor employed. 
C) fluctuate about the same amount as the quantity of labor employed. 
D) do not grow and are therefore not the source of economic growth. 
E) change randomly,sometimes growing,sometimes falling.

Question 6

Name the four factors of production that determine the quantity of real GDP supplied.Which one fluctuates the most over the course of the business cycle?

Accepted Answer

The factors are the quantity of labor em

Question 7

If the money wage rate and the price level both rise by the same proportion,then in the figure above the potential GDP line ________,and the aggregate supply curve ________.

Accepted Answer

A) shifts rightward;does not shift 
B) does not shift;shifts rightward 
C) shifts rightward;shifts rightward 
D) shifts rightward;shifts leftward 
E) does not shift;shifts leftward 
A) shifts rightward;does not shift 
B) does not shift;shifts rightward 
C) shifts rightward;shifts rightward 
D) shifts rightward;shifts leftward 
E) does not shift;shifts leftward

Question 8

A rise in the price level ________ the buying power of money and ________ the quantity of real GDP demanded.

Accepted Answer

A) does not affect;increases 
B) lowers;increases 
C) raises;decreases 
D) lowers;decreases 
E) does not affect;does not change 
A) does not affect;increases 
B) lowers;increases 
C) raises;decreases 
D) lowers;decreases 
E) does not affect;does not change

Question 9

If oil prices increase,then in the short run,real GDP will ________ and the price level will ________.

Accepted Answer

A) increase;rise 
B) increase;fall 
C) decrease;rise 
D) decrease;fall 
E) not change;rise 
A) increase;rise 
B) increase;fall 
C) decrease;rise 
D) decrease;fall 
E) not change;rise

Question 10

If the money wage rate rises,

Accepted Answer

A) the AS curve shifts rightward. 
B) there is a movement up along the AS curve. 
C) the AS curve shifts leftward. 
D) there is a movement down along the AS curve. 
E) there is neither a movement along or a shift in the AS curve. 
A) the AS curve shifts rightward. 
B) there is a movement up along the AS curve. 
C) the AS curve shifts leftward. 
D) there is a movement down along the AS curve. 
E) there is neither a movement along or a shift in the AS curve.

Question 11

If investment spending increases by $1 million,then the aggregate demand curve shifts

Accepted Answer

A) rightward by $1 million. 
B) rightward by more than $1 million. 
C) rightward by less than $1 million. 
D) leftward by more than $1 million. 
E) leftward by less than $1 million. 
A) rightward by $1 million. 
B) rightward by more than $1 million. 
C) rightward by less than $1 million. 
D) leftward by more than $1 million. 
E) leftward by less than $1 million.

Question 12

-Based on the table above,
a.What is the equilibrium price level and real GDP?
b.If potential GDP is $11.0 trillion,what does that imply about the economy's level of employment?
c.If potential GDP is $9.0 trillion,what does that imply about the economy's level of employment?

Accepted Answer

a.The equilibrium price level is 105;the

Question 13

A rise in the price level

Accepted Answer

A) decreases aggregate demand. 
B) increases aggregate demand. 
C) decreases the quantity of real GDP demanded. 
D) increases the quantity of real GDP demanded. 
E) has no effect on aggregate demand or on the quantity of real GDP demanded. 
A) decreases aggregate demand. 
B) increases aggregate demand. 
C) decreases the quantity of real GDP demanded. 
D) increases the quantity of real GDP demanded. 
E) has no effect on aggregate demand or on the quantity of real GDP demanded.

Question 14

When the quantity of real GDP demanded exceeds the quantity of real GDP supplied,firms

Accepted Answer

A) increase production and prices. 
B) decrease production and prices. 
C) increase production and lower prices. 
D) decrease production and increase prices. 
E) do not change production because aggregate demand and potential GDP will adjust. 
A) increase production and prices. 
B) decrease production and prices. 
C) increase production and lower prices. 
D) decrease production and increase prices. 
E) do not change production because aggregate demand and potential GDP will adjust.

Question 15

Stagflation is a combination of ________ real GDP and a ________ price level.

Accepted Answer

A) increasing;rising 
B) increasing;falling 
C) decreasing;rising 
D) decreasing;falling 
E) no change in;rising 
A) increasing;rising 
B) increasing;falling 
C) decreasing;rising 
D) decreasing;falling 
E) no change in;rising

Question 16

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

Accepted Answer

Potential GDP is the level of real GDP t

Question 17

In the short-run,an increase in the price of raw materials will ________ the price level and ________ real GDP.

Accepted Answer

A) raise;increase 
B) raise;decrease 
C) raise;not change 
D) lower;increase 
E) lower;decrease 
A) raise;increase 
B) raise;decrease 
C) raise;not change 
D) lower;increase 
E) lower;decrease

Question 18

Can actual real GDP exceed potential GDP?

Accepted Answer

Yes,actual real GDP temporaril

Question 19

A demand-pull inflation initially is characterized by

Accepted Answer

A) increasing real output and a labor shortage. 
B) increasing real output and a labor surplus. 
C) decreasing real output and a labor shortage. 
D) decreasing real output and a labor surplus. 
E) no change in real output and a labor shortage. 
A) increasing real output and a labor shortage. 
B) increasing real output and a labor surplus. 
C) decreasing real output and a labor shortage. 
D) decreasing real output and a labor surplus. 
E) no change in real output and a labor shortage.

Question 20

When cost-push inflation starts,real GDP ________ and the price level ________.

Accepted Answer

A) decreases;falls 
B) does not change;falls 
C) decreases;rises 
D) does not change;does not change 
E) increases;falls 
A) decreases;falls 
B) does not change;falls 
C) decreases;rises 
D) does not change;does not change 
E) increases;falls

What factor changes the quantity of real GDP supplied and results in a movement along the AS curve?

The aggregate supply curve slopes because a in the price level brings a in the real wage rate.

-The table above gives data for the nation of Pearl,a small island in the South Pacific.If a supply shock decreases the quantity of real GDP supplied by $6 billion at each price level,the new equilibrium real GDP is

The figure above shows aggregate demand curves. -Based on the figure above,the aggregate demand curve will shift from AD0 to AD2 when

Over the business cycle,factors such as the quantity of capital,human capital and technology

Name the four factors of production that determine the quantity of real GDP supplied.Which one fluctuates the most over the course of the business cycle?

If the money wage rate and the price level both rise by the same proportion,then in the figure above the potential GDP line ,and the aggregate supply curve .

A rise in the price level the buying power of money and the quantity of real GDP demanded.

If oil prices increase,then in the short run,real GDP will and the price level will .

If the money wage rate rises,

If investment spending increases by $1 million,then the aggregate demand curve shifts

-Based on the table above, a.What is the equilibrium price level and real GDP? b.If potential GDP is $11.0 trillion,what does that imply about the economy's level of employment? c.If potential GDP is $9.0 trillion,what does that imply about the economy's level of employment?

A rise in the price level

When the quantity of real GDP demanded exceeds the quantity of real GDP supplied,firms

Stagflation is a combination of real GDP and a price level.

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

In the short-run,an increase in the price of raw materials will the price level and real GDP.

Can actual real GDP exceed potential GDP?

A demand-pull inflation initially is characterized by

When cost-push inflation starts,real GDP and the price level .

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Fiscal Policy and Monetary Policy

Filters

Exam 19: Aggregate Supply and Aggregate Demand

What factor changes the quantity of real GDP supplied and results in a movement along the AS curve?

The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate.

-The table above gives data for the nation of Pearl,a small island in the South Pacific.If a supply shock decreases the quantity of real GDP supplied by $6 billion at each price level,the new equilibrium real GDP is

The figure above shows aggregate demand curves. -Based on the figure above,the aggregate demand curve will shift from AD0 to AD2 when

Over the business cycle,factors such as the quantity of capital,human capital and technology

Name the four factors of production that determine the quantity of real GDP supplied.Which one fluctuates the most over the course of the business cycle?

If the money wage rate and the price level both rise by the same proportion,then in the figure above the potential GDP line ________,and the aggregate supply curve ________.

A rise in the price level ________ the buying power of money and ________ the quantity of real GDP demanded.

If oil prices increase,then in the short run,real GDP will ________ and the price level will ________.

If the money wage rate rises,

If investment spending increases by $1 million,then the aggregate demand curve shifts

-Based on the table above, a.What is the equilibrium price level and real GDP? b.If potential GDP is $11.0 trillion,what does that imply about the economy's level of employment? c.If potential GDP is $9.0 trillion,what does that imply about the economy's level of employment?

A rise in the price level

When the quantity of real GDP demanded exceeds the quantity of real GDP supplied,firms

Stagflation is a combination of ________ real GDP and a ________ price level.

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

In the short-run,an increase in the price of raw materials will ________ the price level and ________ real GDP.

Can actual real GDP exceed potential GDP?

A demand-pull inflation initially is characterized by

When cost-push inflation starts,real GDP ________ and the price level ________.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Fiscal Policy and Monetary Policy

Filters

The aggregate supply curve slopes because a in the price level brings a in the real wage rate.

If the money wage rate and the price level both rise by the same proportion,then in the figure above the potential GDP line ,and the aggregate supply curve .

A rise in the price level the buying power of money and the quantity of real GDP demanded.

If oil prices increase,then in the short run,real GDP will and the price level will .

Stagflation is a combination of real GDP and a price level.

In the short-run,an increase in the price of raw materials will the price level and real GDP.

When cost-push inflation starts,real GDP and the price level .