Question 1

During the 2008-2009 unemployment rose from about 4.4% to about

Accepted Answer

A)   6%
B)   8%
C)   10%
D)   12%

Question 2

A decrease in the availability of an important major resource such as oil shifts

Accepted Answer

A)   aggregate supply right.
B)   aggregate supply left.
C)   aggregate demand right.
D)   aggregate demand left.

Question 3

When the money supply increases

Accepted Answer

A)   interest rates fall and so aggregate demand shifts right.
B)   interest rates fall and so aggregate demand shifts left.
C)   interest rates rise and so aggregate demand shifts right.
D)   interest rates rise and so aggregate demand shifts left.

Question 4

Suppose people anticipate an increase in the expected price level. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

Accepted Answer

The short-run aggreg...

Question 5

Other things the same, the aggregate quantity of goods demanded in the U.S. increases if

Accepted Answer

A)   real wealth falls.
B)   the interest rate rises.
C)   the dollar depreciates.
D)   None of the above is correct.

Question 6

The investment component of GDP measures spending on

Accepted Answer

A)   financial assets such as stocks and bonds. During recessions it declines by a relatively large amount.
B)   residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively large amount.
C)   financial assets such as stocks and bonds. During recessions it declines by a relatively small amount.
D)   residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively small amount.

Question 7

An increase in the expected price level shifts the

Accepted Answer

A)   short-run and long-run aggregate supply curves left.
B)   the short-run but not the long-run aggregate supply curve left.
C)   the long-run but not the short-run aggregate supply curve left.
D)   neither the long-run nor the short-run aggregate supply curve left.

Question 8

Part of the explanation for why the aggregate-demand curve slopes downward is that a decrease in the price level

Accepted Answer

A)   decreases the real value of money.
B)   increases the real value of the dollar in foreign exchange markets.
C)   decreases the interest rate.
D)   All of the above are correct.

Question 9

Suppose the economy is in long-run equilibrium. If there is an increase in government purchases at the same time there is a large increase in the price of oil, then in the short-run

Accepted Answer

A)   real GDP will rise and the price level might rise, fall, or stay the same.
B)   real GDP will fall and the price level might rise, fall, or stay the same.
C)   the price level will rise, and real GDP might rise, fall, or stay the same.
D)   the price level will fall, and real GDP might rise, fall, or stay the same.

Question 10

An increase in the money supply causes the interest rate to fall, investment spending to rise, and aggregate demand to shift right.

Accepted Answer

A) True 
 B)False

Question 11

Figure 33-7. 
-Refer to Stock Market Boom 2015. In the long run, the change in price expectations created by the stock market boom shifts

Accepted Answer

A)   long-run aggregate supply right.
B)   long-run aggregate supply left.
C)   short-run aggregate supply right.
D)   short-run aggregate supply left.

Question 12

Figure 33-6. 
-Refer to Figure 33-6. Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Accepted Answer

A)   LRAS1
B)   LRAS2
C)   LRAS3
D)   Both LRAS1 and LRAS3

Question 13

Which of the following shifts short-run aggregate supply right?

Accepted Answer

A)   an increase in the minimum wage
B)   an increase in immigration from abroad
C)   an increase in the price of oil
D)   an increase in the actual price level

Question 14

Other things the same, an increase in the price level causes the interest rate to

Accepted Answer

A)   increase, the dollar to depreciate, and net exports to increase.
B)   increase, the dollar to appreciate, and net exports to decrease.
C)   decrease, the dollar to depreciate, and net exports to increase.
D)   decrease, the dollar to appreciate, and net exports to decrease.

Question 15

Of the following theories, which is consistent with a vertical long-run aggregate supply curve?

Accepted Answer

A)   the sticky-wage theory
B)   misperceptions theory
C)   both the sticky-wage and misperceptions theories.
D)   neither the sticky-wage nor the misperceptions theory.

Question 16

If the price level is higher than expected, firms might raise their production in the short run if

Accepted Answer

A)   the nominal wage they pay their employees was set based on the expected price level.
B)   prices are costly to adjust and they have set their price at some time in the past but are not ready to change it.
C)   they believe that the price of their product has risen relative to the price of other products, when in fact the rise in the price of their product reflects an increase in the general price level.
D)   All of the above are correct.

Question 17

Which of the following decreases in response to the interest-rate effect from an increase in the price level?

Accepted Answer

A)   both investment and consumption
B)   consumption but not investment
C)   investment but not consumption
D)   neither investment nor consumption

Question 18

The division of variables into real and nominal is a dichotomy assumed by

Accepted Answer

A)   classical economists.
B)   John Maynard Keynes.
C)   the wealth effect.
D)   short-run macroeconomic theory.

Question 19

Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP growth and inflation can be explained by

Accepted Answer

A)   continuing technological progress alone.
B)   continuing increases in the money supply alone.
C)   continued technological progress and continuing increases in the money supply.
D)   None of the above can explain continuing real GDP growth and inflation.

Question 20

If banks and speculators in the U.S. decided to exchange U.S. dollars for the foreign currencies of other countries, but foreigners do not desire to increase their holdings of U.S. dollars, then U.S. net exports would

Accepted Answer

A)   rise and aggregate demand would shift left.
B)   rise and aggregate demand would shift right.
C)   fall and aggregate demand would shift left.
D)   fall and aggregate demand would shift right.

Exam 20: Aggregate Demand and Aggregate Supply

Other things the same, an increase in the price level causes the interest rate to

Correct AnswerverifiedShow Answer

Part of the explanation for why the aggregate-demand curve slopes downward is that a decrease in the price level

Correct AnswerverifiedShow Answer

The division of variables into real and nominal is a dichotomy assumed by

Correct AnswerverifiedShow Answer

Figure 33-6. -Refer to Figure 33-6. Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Correct AnswerverifiedShow Answer

Which of the following decreases in response to the interest-rate effect from an increase in the price level?

Correct AnswerverifiedShow Answer

Of the following theories, which is consistent with a vertical long-run aggregate supply curve?

Correct AnswerverifiedShow Answer

If banks and speculators in the U.S. decided to exchange U.S. dollars for the foreign currencies of other countries, but foreigners do not desire to increase their holdings of U.S. dollars, then U.S. net exports would

Correct AnswerverifiedShow Answer

If the price level is higher than expected, firms might raise their production in the short run if

Correct AnswerverifiedShow Answer

Other things the same, the aggregate quantity of goods demanded in the U.S. increases if

Correct AnswerverifiedShow Answer

When the money supply increases

Correct AnswerverifiedShow Answer

A decrease in the availability of an important major resource such as oil shifts

Correct AnswerverifiedShow Answer

Figure 33-7. -Refer to Stock Market Boom 2015. In the long run, the change in price expectations created by the stock market boom shifts

Correct AnswerverifiedShow Answer

During the 2008-2009 unemployment rose from about 4.4% to about

Correct AnswerverifiedShow Answer

An increase in the expected price level shifts the

Correct AnswerverifiedShow Answer

Which of the following shifts short-run aggregate supply right?

Correct AnswerverifiedShow Answer

The investment component of GDP measures spending on

Correct AnswerverifiedShow Answer

Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP growth and inflation can be explained by

Correct AnswerverifiedShow Answer

Suppose people anticipate an increase in the expected price level. Which curves) in the aggregate demand and aggregate supply model would be affected, and which way would it they) shift?

Correct AnswerverifiedThe short-run aggreg...View AnswerShow Answer

An increase in the money supply causes the interest rate to fall, investment spending to rise, and aggregate demand to shift right.

Correct AnswerverifiedShow Answer

Suppose the economy is in long-run equilibrium. If there is an increase in government purchases at the same time there is a large increase in the price of oil, then in the short-run

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The short-run aggreg...
View Answer

Correct Answer
verified

Correct Answer
verified