Question 1

A positive supply shock causes

Accepted Answer

A)  falling average prices. 
B)  decreased real GDP. 
C)  increased unemployment. 
D)  stagflation. 
E)  none of the above. 
A)  falling average prices. 
B)  decreased real GDP. 
C)  increased unemployment. 
D)  stagflation. 
E)  none of the above.

Question 2

The long run is a period of time when the inflation rate equals zero.

Accepted Answer

A) True 
 B)False

Question 3

As the price level in Canada rises, the rest of the world (R.O.W.) buys fewer Canadian products and services.

Accepted Answer

A) True 
 B)False

Question 4

Falling input prices decrease short-run aggregate supply.

Accepted Answer

A) True 
 B)False

Question 5

Say's Law can still apply to an equilibrium over time with increasing inputs, with the participation of

Accepted Answer

A)  Revenue Canada. 
B)  R.O.W. 
C)  the Minister of Finance. 
D)  the banking system. 
E)  the Supreme Court of Canada. 
A)  Revenue Canada. 
B)  R.O.W. 
C)  the Minister of Finance. 
D)  the banking system. 
E)  the Supreme Court of Canada.

Question 6

A rise in the price level increases aggregate quantity demanded.

Accepted Answer

A) True 
 B)False

Question 7

"Growth in living standards" means increasing real GDP per person.

Accepted Answer

A) True 
 B)False

Question 8

Unemployment is represented by points 1 inside the macro PPF.
2 outside the macro PPF.
3 to the left of LAS.
4 to the right of LAS.

Accepted Answer

A)  1 and 3 
B)  1 and 4 
C)  2 and 3 
D)  2 and 4 
E)  1 only 
A)  1 and 3 
B)  1 and 4 
C)  2 and 3 
D)  2 and 4 
E)  1 only

Question 9

Aggregate quantity supplied increases if

Accepted Answer

A)  the price level rises. 
B)  prices for resource inputs fall. 
C)  technology improves. 
D)  the price level falls. 
E)  prices for resource inputs rise. 
A)  the price level rises. 
B)  prices for resource inputs fall. 
C)  technology improves. 
D)  the price level falls. 
E)  prices for resource inputs rise.

Question 10

Aggregate quantity supplied decreases if

Accepted Answer

A)  the price level rises. 
B)  prices for resource inputs fall. 
C)  technology improves. 
D)  the price level falls. 
E)  prices for resource inputs rise. 
A)  the price level rises. 
B)  prices for resource inputs fall. 
C)  technology improves. 
D)  the price level falls. 
E)  prices for resource inputs rise.

Question 11

The "Yes - Markets Self-Adjust" camp argues that

Accepted Answer

A)  expectations are more important than interest rates for business investment decisions. 
B)  most shocks are internal to the economy. 
C)  supply shocks are more important than demand shocks for explaining business cycles. 
D)  business expectations are quickly changeable. 
E)  government is the solution to business cycles, not the problem. 
A)  expectations are more important than interest rates for business investment decisions. 
B)  most shocks are internal to the economy. 
C)  supply shocks are more important than demand shocks for explaining business cycles. 
D)  business expectations are quickly changeable. 
E)  government is the solution to business cycles, not the problem.

Question 12

Rising average prices and increased unemployment most likely come from

Accepted Answer

A)  a negative demand shock. 
B)  a negative supply shock. 
C)  a positive demand shock. 
D)  a positive supply shock. 
E)  technological change. 
A)  a negative demand shock. 
B)  a negative supply shock. 
C)  a positive demand shock. 
D)  a positive supply shock. 
E)  technological change.

Question 13

Unemployment is represented by points inside the macro production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 14

Inputs do not appear on the graph of the macro production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 15

The targets for a macro economy that performs well are

Accepted Answer

A)  stable prices. 
B)  full employment. 
C)  steady growth in living standards. 
D)  all of the above. 
E)  none of the above. 
A)  stable prices. 
B)  full employment. 
C)  steady growth in living standards. 
D)  all of the above. 
E)  none of the above.

Question 16

Negative and positive demand shocks cannot happen at the same time.

Accepted Answer

A) True 
 B)False

Question 17

The short run is a period of time

Accepted Answer

A)  when all input prices have adjusted to clear markets. 
B)  when all input and output prices have adjusted to equilibrium prices. 
C)  when some input prices do not change. 
D)  shorter than 10 years. 
E)  shorter than 1 year. 
A)  when all input prices have adjusted to clear markets. 
B)  when all input and output prices have adjusted to equilibrium prices. 
C)  when some input prices do not change. 
D)  shorter than 10 years. 
E)  shorter than 1 year.

Question 18

Scientific discoveries allow for technological change as a supply shock.

Accepted Answer

A) True 
 B)False

Question 19

Human capital decisions affect both long-run and short-run aggregate supply.

Accepted Answer

A) True 
 B)False

Question 20

The long run is a period of time longer than 10 years.

Accepted Answer

A) True 
 B)False

A positive supply shock causes

The long run is a period of time when the inflation rate equals zero.

As the price level in Canada rises, the rest of the world (R.O.W.) buys fewer Canadian products and services.

Falling input prices decrease short-run aggregate supply.

Say's Law can still apply to an equilibrium over time with increasing inputs, with the participation of

A rise in the price level increases aggregate quantity demanded.

"Growth in living standards" means increasing real GDP per person.

Unemployment is represented by points 1 inside the macro PPF. 2 outside the macro PPF. 3 to the left of LAS. 4 to the right of LAS.

Aggregate quantity supplied increases if

Aggregate quantity supplied decreases if

The "Yes - Markets Self-Adjust" camp argues that

Rising average prices and increased unemployment most likely come from

Unemployment is represented by points inside the macro production possibilities frontier.

Inputs do not appear on the graph of the macro production possibilities frontier.

The targets for a macro economy that performs well are

Negative and positive demand shocks cannot happen at the same time.

The short run is a period of time

Scientific discoveries allow for technological change as a supply shock.

Human capital decisions affect both long-run and short-run aggregate supply.

The long run is a period of time longer than 10 years.

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

Exam 8: Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

A positive supply shock causes

The long run is a period of time when the inflation rate equals zero.

As the price level in Canada rises, the rest of the world (R.O.W.) buys fewer Canadian products and services.

Falling input prices decrease short-run aggregate supply.

Say's Law can still apply to an equilibrium over time with increasing inputs, with the participation of

A rise in the price level increases aggregate quantity demanded.

"Growth in living standards" means increasing real GDP per person.

Unemployment is represented by points 1 inside the macro PPF. 2 outside the macro PPF. 3 to the left of LAS. 4 to the right of LAS.

Aggregate quantity supplied increases if

Aggregate quantity supplied decreases if

The "Yes - Markets Self-Adjust" camp argues that

Rising average prices and increased unemployment most likely come from

Unemployment is represented by points inside the macro production possibilities frontier.

Inputs do not appear on the graph of the macro production possibilities frontier.

The targets for a macro economy that performs well are

Negative and positive demand shocks cannot happen at the same time.

The short run is a period of time

Scientific discoveries allow for technological change as a supply shock.

Human capital decisions affect both long-run and short-run aggregate supply.

The long run is a period of time longer than 10 years.

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Coordinating Smart Choices: Demand and Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters