Question 1

A new government policy to build more public infrastructure like roads, transit and sewers

Accepted Answer

A)  decreases short-run aggregate supply. 
B)  increases aggregate quantity demanded. 
C)  decreases aggregate quantity demanded. 
D)  increases aggregate demand. 
E)  decreases aggregate demand. 
A)  decreases short-run aggregate supply. 
B)  increases aggregate quantity demanded. 
C)  decreases aggregate quantity demanded. 
D)  increases aggregate demand. 
E)  decreases aggregate demand.

Question 2

An increase in savings causes the interest rate to fall in the market for loanable funds.

Accepted Answer

A) True 
 B)False

Question 3

Rising input prices shift both SAS and LAS leftward.

Accepted Answer

A) True 
 B)False

Question 4

A positive supply shock in macroeconomics is like an increase in quantity supplied in microeconomics.

Accepted Answer

A) True 
 B)False

Question 5

The exchange rate is the price of loanable funds.

Accepted Answer

A) True 
 B)False

Question 6

Rising average prices and increased unemployment could be caused by increases in the price of oil.

Accepted Answer

A) True 
 B)False

Question 7

Government investments to improve the quality of public infrastructure like roads, transit and sewers

Accepted Answer

A)  decreases both long-run and short-run aggregate supply. 
B)  increases aggregate quantity supplied. 
C)  increases only long-run aggregate supply. 
D)  increases both long-run and short-run aggregate supply. 
E)  decreases aggregate quantity supplied. 
A)  decreases both long-run and short-run aggregate supply. 
B)  increases aggregate quantity supplied. 
C)  increases only long-run aggregate supply. 
D)  increases both long-run and short-run aggregate supply. 
E)  decreases aggregate quantity supplied.

Question 8

When an American loses $1,000 at Casino Rama in Ontario, aggregate demand in Canada is not affected.

Accepted Answer

A) True 
 B)False

Question 9

Increases in the quality of inputs that do not affect the quantity of those inputs shift LAS rightward and increase aggregate quantity supplied.

Accepted Answer

A) True 
 B)False

Question 10

Long-run aggregate supply represents the macroeconomic performance targets of full employment and stable prices.

Accepted Answer

A) True 
 B)False

Question 11

Which macroeconomic performance targets are not represented by long-run aggregate supply?

Accepted Answer

A)  economic growth and stable prices 
B)  economic growth and full employment 
C)  economic growth and potential GDP 
D)  full employment and potential GDP 
E)  stable prices and potential GDP 
A)  economic growth and stable prices 
B)  economic growth and full employment 
C)  economic growth and potential GDP 
D)  full employment and potential GDP 
E)  stable prices and potential GDP

Question 12

The interest rate is the price of loanable funds.

Accepted Answer

A) True 
 B)False

Question 13

Supply plans to increase the quality of inputs affect aggregate quantity supplied.

Accepted Answer

A) True 
 B)False

Question 14

The long run is a period of time when all prices have adjusted to equilibrium prices.

Accepted Answer

A) True 
 B)False

Question 15

The "No - Markets Fail Often" camp argues that

Accepted Answer

A)  interest rates are more important than expectations 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 rational. 
E)  government is part of the problem of business cycles. 
A)  interest rates are more important than expectations 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 rational. 
E)  government is part of the problem of business cycles.

Question 16

Falling average prices and higher unemployment most likely come from

Accepted Answer

A)  investor pessimism. 
B)  investor optimism. 
C)  lower exchange rates. 
D)  lower interest rates. 
E)  lower income tax rates. 
A)  investor pessimism. 
B)  investor optimism. 
C)  lower exchange rates. 
D)  lower interest rates. 
E)  lower income tax rates.

Question 17

The best measure of "growth in living standards" is increasing nominal GDP.

Accepted Answer

A) True 
 B)False

Question 18

What can directly change aggregate demand and long-run aggregate supply?

Accepted Answer

A)  GDP in the rest of the world (R.O.W.). 
B)  resource input prices. 
C)  interest rates. 
D)  value of the Canadian dollar. 
E)  business investment. 
A)  GDP in the rest of the world (R.O.W.). 
B)  resource input prices. 
C)  interest rates. 
D)  value of the Canadian dollar. 
E)  business investment.

Question 19

In the loanable funds market, businesses do most of the borrowing to finance investment spending.

Accepted Answer

A) True 
 B)False

Question 20

In explaining business cycles, the "Yes - Markets Self-Adjust" camp believes government is part of the problem, not part of the solution.

Accepted Answer

A) True 
 B)False

A new government policy to build more public infrastructure like roads, transit and sewers

An increase in savings causes the interest rate to fall in the market for loanable funds.

Rising input prices shift both SAS and LAS leftward.

A positive supply shock in macroeconomics is like an increase in quantity supplied in microeconomics.

The exchange rate is the price of loanable funds.

Rising average prices and increased unemployment could be caused by increases in the price of oil.

Government investments to improve the quality of public infrastructure like roads, transit and sewers

When an American loses $1,000 at Casino Rama in Ontario, aggregate demand in Canada is not affected.

Increases in the quality of inputs that do not affect the quantity of those inputs shift LAS rightward and increase aggregate quantity supplied.

Long-run aggregate supply represents the macroeconomic performance targets of full employment and stable prices.

Which macroeconomic performance targets are not represented by long-run aggregate supply?

The interest rate is the price of loanable funds.

Supply plans to increase the quality of inputs affect aggregate quantity supplied.

The long run is a period of time when all prices have adjusted to equilibrium prices.

The "No - Markets Fail Often" camp argues that

Falling average prices and higher unemployment most likely come from

The best measure of "growth in living standards" is increasing nominal GDP.

What can directly change aggregate demand and long-run aggregate supply?

In the loanable funds market, businesses do most of the borrowing to finance investment spending.

In explaining business cycles, the "Yes - Markets Self-Adjust" camp believes government is part of the problem, not part of the solution.

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 new government policy to build more public infrastructure like roads, transit and sewers

An increase in savings causes the interest rate to fall in the market for loanable funds.

Rising input prices shift both SAS and LAS leftward.

A positive supply shock in macroeconomics is like an increase in quantity supplied in microeconomics.

The exchange rate is the price of loanable funds.

Rising average prices and increased unemployment could be caused by increases in the price of oil.

Government investments to improve the quality of public infrastructure like roads, transit and sewers

When an American loses $1,000 at Casino Rama in Ontario, aggregate demand in Canada is not affected.

Increases in the quality of inputs that do not affect the quantity of those inputs shift LAS rightward and increase aggregate quantity supplied.

Long-run aggregate supply represents the macroeconomic performance targets of full employment and stable prices.

Which macroeconomic performance targets are not represented by long-run aggregate supply?

The interest rate is the price of loanable funds.

Supply plans to increase the quality of inputs affect aggregate quantity supplied.

The long run is a period of time when all prices have adjusted to equilibrium prices.

The "No - Markets Fail Often" camp argues that

Falling average prices and higher unemployment most likely come from

The best measure of "growth in living standards" is increasing nominal GDP.

What can directly change aggregate demand and long-run aggregate supply?

In the loanable funds market, businesses do most of the borrowing to finance investment spending.

In explaining business cycles, the "Yes - Markets Self-Adjust" camp believes government is part of the problem, not part of the solution.

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