Question 1

Aggregate demand increases when interest rates fall.

Accepted Answer

A) True 
 B)False

Question 2

The OPEC oil price shocks of the 1970s were example of

Accepted Answer

A)  negative demand shocks. 
B)  negative supply shocks. 
C)  positive demand shocks. 
D)  positive supply shocks. 
E)  what happens from listening to too much ABBA. 
A)  negative demand shocks. 
B)  negative supply shocks. 
C)  positive demand shocks. 
D)  positive supply shocks. 
E)  what happens from listening to too much ABBA.

Question 3

The origins of most shocks for the "Yes - Markets Self-Adjust" camp are internal to the economy.

Accepted Answer

A) True 
 B)False

Question 4

A negative supply shock in macroeconomics is like a decrease in supply in microeconomics.

Accepted Answer

A) True 
 B)False

Question 5

Changes in supply plans for existing inputs affect aggregate quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

Full employment is represented by points 1 inside the macro PPF.
2 outside the macro PPF.
3 on the macro PPF.
4 to the left of LAS.
5 to the right of LAS.
6 on LAS.

Accepted Answer

A)  1 and 4 
B)  1 and 5 
C)  2 and 4 
D)  2 and 5 
E)  3 and 6 
A)  1 and 4 
B)  1 and 5 
C)  2 and 4 
D)  2 and 5 
E)  3 and 6

Question 7

There is a negative demand shock when

Accepted Answer

A)  interest rates fall. 
B)  consumers become more optimistic. 
C)  government reduces net taxes. 
D)  interest rates rise. 
E)  government spending increases. 
A)  interest rates fall. 
B)  consumers become more optimistic. 
C)  government reduces net taxes. 
D)  interest rates rise. 
E)  government spending increases.

Question 8

The language of output gaps - recessionary gaps and inflationary gaps - applies to outcomes of both demand shocks and supply shocks.

Accepted Answer

A) True 
 B)False

Question 9

A rising price level

Accepted Answer

A)  increases aggregate demand. 
B)  decreases aggregate quantity supplied. 
C)  decreases aggregate quantity demanded. 
D)  increases aggregate quantity demanded. 
E)  decreases aggregate demand. 
A)  increases aggregate demand. 
B)  decreases aggregate quantity supplied. 
C)  decreases aggregate quantity demanded. 
D)  increases aggregate quantity demanded. 
E)  decreases aggregate demand.

Question 10

Suppose there is an increase in the quantity of capital. As a result, the SAS

Accepted Answer

A)  and the LAS curves both shift leftward. 
B)  and the LAS curves both shift rightward. 
C)  curve does not shift but the LAS curve shifts rightward. 
D)  curve does not shift but the LAS curve shifts leftward. 
E)  shifts rightward, but the LAS curve does not shift. 
A)  and the LAS curves both shift leftward. 
B)  and the LAS curves both shift rightward. 
C)  curve does not shift but the LAS curve shifts rightward. 
D)  curve does not shift but the LAS curve shifts leftward. 
E)  shifts rightward, but the LAS curve does not shift.

Question 11

The "No - Markets Fail Often" camp argues that

Accepted Answer

A)  expectations are more important than interest rates for business investment decisions. 
B)  most shocks are external 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)  expectations are more important than interest rates for business investment decisions. 
B)  most shocks are external 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 12

As the price level in Canada rises, Canadians rest of buys fewer products and services from R.O.W.

Accepted Answer

A) True 
 B)False

Question 13

The short run is a period of time shorter than 1 year.

Accepted Answer

A) True 
 B)False

Question 14

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 external to the economy. 
C)  demand shocks are more important than supply 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 external to the economy. 
C)  demand shocks are more important than supply shocks for explaining business cycles. 
D)  business expectations are rational. 
E)  government is part of the problem of business cycles.

Question 15

Net taxes are taxes net of

Accepted Answer

A)  income. 
B)  government spending. 
C)  consumer saving. 
D)  transfer payments. 
E)  import spending. 
A)  income. 
B)  government spending. 
C)  consumer saving. 
D)  transfer payments. 
E)  import spending.

Question 16

The "No - Markets Fail Often" camp believes that people make logical, rational choices, based on the best information available.

Accepted Answer

A) True 
 B)False

Question 17

Mismatches between aggregate supply and aggregate demand cause recessions and expansions.

Accepted Answer

A) True 
 B)False

Question 18

Increases in the quality of inputs that do not affect the quantity of those inputs, increase

Accepted Answer

A)  long-run aggregate supply but not short-run aggregate supply 
B)  aggregate quantity supplied. 
C)  both long-run aggregate supply and short-run aggregate supply. 
D)  short-run aggregate supply but not long-run aggregate supply. 
E)  both long-run aggregate supply and aggregate quantity supplied. 
A)  long-run aggregate supply but not short-run aggregate supply 
B)  aggregate quantity supplied. 
C)  both long-run aggregate supply and short-run aggregate supply. 
D)  short-run aggregate supply but not long-run aggregate supply. 
E)  both long-run aggregate supply and aggregate quantity supplied.

Question 19

Supply shocks cause unemployment and inflation to move in opposite directions.

Accepted Answer

A) True 
 B)False

Question 20

The "Yes - Markets Self-Adjust" camp

Accepted Answer

A)  focuses on the short-run. 
B)  believes in Say's Law. 
C)  believes the economy's self-adjusting mechanisms are slow. 
D)  believes business cycles happen regularly. 
E)  does all of the above. 
A)  focuses on the short-run. 
B)  believes in Say's Law. 
C)  believes the economy's self-adjusting mechanisms are slow. 
D)  believes business cycles happen regularly. 
E)  does all of the above.

Aggregate demand increases when interest rates fall.

The OPEC oil price shocks of the 1970s were example of

The origins of most shocks for the "Yes - Markets Self-Adjust" camp are internal to the economy.

A negative supply shock in macroeconomics is like a decrease in supply in microeconomics.

Changes in supply plans for existing inputs affect aggregate quantity supplied.

Full employment is represented by points 1 inside the macro PPF. 2 outside the macro PPF. 3 on the macro PPF. 4 to the left of LAS. 5 to the right of LAS. 6 on LAS.

There is a negative demand shock when

The language of output gaps - recessionary gaps and inflationary gaps - applies to outcomes of both demand shocks and supply shocks.

A rising price level

Suppose there is an increase in the quantity of capital. As a result, the SAS

The "No - Markets Fail Often" camp argues that

As the price level in Canada rises, Canadians rest of buys fewer products and services from R.O.W.

The short run is a period of time shorter than 1 year.

The "No - Markets Fail Often" camp argues that

Net taxes are taxes net of

The "No - Markets Fail Often" camp believes that people make logical, rational choices, based on the best information available.

Mismatches between aggregate supply and aggregate demand cause recessions and expansions.

Increases in the quality of inputs that do not affect the quantity of those inputs, increase

Supply shocks cause unemployment and inflation to move in opposite directions.

The "Yes - Markets Self-Adjust" camp

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

Aggregate demand increases when interest rates fall.

The OPEC oil price shocks of the 1970s were example of

The origins of most shocks for the "Yes - Markets Self-Adjust" camp are internal to the economy.

A negative supply shock in macroeconomics is like a decrease in supply in microeconomics.

Changes in supply plans for existing inputs affect aggregate quantity supplied.

Full employment is represented by points 1 inside the macro PPF. 2 outside the macro PPF. 3 on the macro PPF. 4 to the left of LAS. 5 to the right of LAS. 6 on LAS.

There is a negative demand shock when

The language of output gaps - recessionary gaps and inflationary gaps - applies to outcomes of both demand shocks and supply shocks.

A rising price level

Suppose there is an increase in the quantity of capital. As a result, the SAS

The "No - Markets Fail Often" camp argues that

As the price level in Canada rises, Canadians rest of buys fewer products and services from R.O.W.

The short run is a period of time shorter than 1 year.

The "No - Markets Fail Often" camp argues that

Net taxes are taxes net of

The "No - Markets Fail Often" camp believes that people make logical, rational choices, based on the best information available.

Mismatches between aggregate supply and aggregate demand cause recessions and expansions.

Increases in the quality of inputs that do not affect the quantity of those inputs, increase

Supply shocks cause unemployment and inflation to move in opposite directions.

The "Yes - Markets Self-Adjust" camp

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