Question 1

Which set of changes will definitely shift the aggregate demand (AD)curve to the right?

Accepted Answer

A)  Business taxes decline and foreign real national income rises. 
B)  Businesses become pessimistic about future sales and the U.S.dollar depreciates. 
C)  Wealth increases and individuals expect higher (future)incomes. 
D)  a and b 
E)  a and c 
A)  Business taxes decline and foreign real national income rises. 
B)  Businesses become pessimistic about future sales and the U.S.dollar depreciates. 
C)  Wealth increases and individuals expect higher (future)incomes. 
D)  a and b 
E)  a and c

Question 2

Exhibit 8-4  
-Refer to Exhibit 8-4.A movement from point A to point B on SRAS1 would have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an adverse supply shock. 
D)  a beneficial supply shock. 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an adverse supply shock. 
D)  a beneficial supply shock.

Question 3

Assume that the economy is currently in short-run equilibrium,then the dollar appreciates in the foreign exchange market.Describe the correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be sure to state what the impact would be on the price level and Real GDP).

Accepted Answer

As the dollar appreciates,foreign goods

Question 4

Starting from short-run equilibrium,the following occurs: the money supply increases and labor productivity increases.What is the effect on the price level and Real GDP in the short run?

Accepted Answer

A)  Real GDP falls and the price level necessarily rises. 
B)  Real GDP rises and the price level necessarily rises. 
C)  Real GDP rises and the effect on the price level cannot be determined. 
D)  Real GDP falls and the effect on the price level cannot be determined. 
E)  none of the above 
A)  Real GDP falls and the price level necessarily rises. 
B)  Real GDP rises and the price level necessarily rises. 
C)  Real GDP rises and the effect on the price level cannot be determined. 
D)  Real GDP falls and the effect on the price level cannot be determined. 
E)  none of the above

Question 5

Changes in which of the following will not cause the SRAS curve to shift?

Accepted Answer

A)  the wage rate 
B)  prices of nonlabor inputs 
C)  the price level 
D)  productivity 
E)  All of the above will cause the SRAS curve to shift. 
A)  the wage rate 
B)  prices of nonlabor inputs 
C)  the price level 
D)  productivity 
E)  All of the above will cause the SRAS curve to shift.

Question 6

An increase in the price of oil will cause

Accepted Answer

A)  a movement down the SRAS curve. 
B)  a movement up the SRAS curve. 
C)  a leftward shift in the SRAS curve. 
D)  a rightward shift in the SRAS curve. 
E)  no change regarding the SRAS curve. 
A)  a movement down the SRAS curve. 
B)  a movement up the SRAS curve. 
C)  a leftward shift in the SRAS curve. 
D)  a rightward shift in the SRAS curve. 
E)  no change regarding the SRAS curve.

Question 7

Which of the following statements is false?

Accepted Answer

A)  Some prices in an economy adjust faster than other prices. 
B)  Aggregate demand curves slope downward. 
C)  Firms may not adjust their prices immediately because they may be unable to figure out whether a decline in demand is temporary or permanent. 
D)  The absolute price of a good is the dollar or money price of the good. 
E)  none of the above 
A)  Some prices in an economy adjust faster than other prices. 
B)  Aggregate demand curves slope downward. 
C)  Firms may not adjust their prices immediately because they may be unable to figure out whether a decline in demand is temporary or permanent. 
D)  The absolute price of a good is the dollar or money price of the good. 
E)  none of the above

Question 8

Which of the following will not lead to a leftward shift in the SRAS curve?

Accepted Answer

A)  an increase in wage rates 
B)  an increase in the prices of nonlabor inputs 
C)  an increase in productivity 
D)  an adverse supply shock 
A)  an increase in wage rates 
B)  an increase in the prices of nonlabor inputs 
C)  an increase in productivity 
D)  an adverse supply shock

Which set of changes will definitely shift the aggregate demand (AD)curve to the right?

Exhibit 8-4 -Refer to Exhibit 8-4.A movement from point A to point B on SRAS₁ would have been the result of

Starting from short-run equilibrium,the following occurs: the money supply increases and labor productivity increases.What is the effect on the price level and Real GDP in the short run?

Changes in which of the following will not cause the SRAS curve to shift?

An increase in the price of oil will cause

Which of the following statements is false?

Which of the following will not lead to a leftward shift in the SRAS curve?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Macroeconomic Measurements, Gdp and Real Gdp

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

Exam 8: Aggregate Demand and Aggregate Supply

Which set of changes will definitely shift the aggregate demand (AD)curve to the right?

Exhibit 8-4 -Refer to Exhibit 8-4.A movement from point A to point B on SRAS1 would have been the result of

Starting from short-run equilibrium,the following occurs: the money supply increases and labor productivity increases.What is the effect on the price level and Real GDP in the short run?

Changes in which of the following will not cause the SRAS curve to shift?

An increase in the price of oil will cause

Which of the following statements is false?

Which of the following will not lead to a leftward shift in the SRAS curve?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Macroeconomic Measurements, Gdp and Real Gdp

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

Exhibit 8-4 -Refer to Exhibit 8-4.A movement from point A to point B on SRAS₁ would have been the result of