Question 1

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

Accepted Answer

A)   the slope of short-run aggregate supply.
B)   the slope of long-run aggregate supply.
C)   the slope of the aggregate-demand curve.
D)   everything that makes the aggregate-demand curve shift.E) B) and C)
F) C) and D)

Question 2

Historically, as recessions have ended the unemployment rate declined

Accepted Answer

A)   gradually to near zero.
B)   rapidly to near zero.
C)   gradually to a rate of about 5%-6%.
D)   rapidly to a rate of about 5%-6%.E) All of the above
F) C) and D)

Question 3

The long-run aggregate supply curve shifts right if

Accepted Answer

A)   immigration from abroad increases.
B)   the capital stock increases.
C)   technology advances.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 4

Figure 33-13. 
-Refer to Figure 33-13. Identify the price and output levels consistent with long-run equilibrium.

Accepted Answer

The answer of Figure 33-13. 
-Refer to Figure 33-13. Identify...

Question 5

If the actual price level is 165, but people had been expecting it to be 160, then

Accepted Answer

A)   the quantity of output supplied rises, but only in the short run.
B)   the quantity of output supplied rises in the short run and the long run.
C)   the quantity of output supplied falls, but only in the short run.
D)   the quantity of output supplied falls in the short run and the long run.E) A) and B)
F) All of the above

Question 6

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

Accepted Answer

A)   an increase in the price level
B)   an increase in the minimum wage
C)   a decrease in the price of oil
D)   more people migrate abroad than immigrate from abroadE) B) and D)
F) B) and C)

Question 7

The model of aggregate demand and aggregate supply explains the relationship between

Accepted Answer

A)   the price and quantity of a particular good.
B)   unemployment and output.
C)   wages and employment.
D)   real GDP and the price level.E) B) and D)
F) All of the above

Question 8

When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production?

Accepted Answer

A)   both menu costs and mistaking a price level change for a change in relative prices
B)   menu costs but not mistaking a price level change for a change in relative prices
C)   mistaking a price level change for a change in relative price but not menu costs
D)   neither menu costs nor mistaking a price level change for a change in relative pricesE) A) and C)
F) A) and B)

Question 9

When the price level changes, which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

Accepted Answer

A)   the real value of wealth
B)   the interest rate
C)   the value of currency in the market for foreign exchange
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 10

If there are sticky wages, and the price level is greater than what was expected, then

Accepted Answer

A)   the quantity of aggregate goods and services supplied falls, which is shown by a shift of the short-run aggregate supply curve to the left.
B)   the quantity of aggregate goods and services supplied falls, as shown by a movement to the left along the short-run aggregate supply curve.
C)   the quantity of aggregate goods and services supplied rises, as shown by a shift of the short-run aggregate supply curve to the right.
D)   the quantity of aggregate goods and services supplied rises, as shown by a movement to the right along the short-run aggregate supply curve.E) A) and C)
F) A) and B)

Question 11

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

Accepted Answer

A)   an increase in the actual price level
B)   an increase in the expected price level
C)   an increase in the capital stock
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 12

According to the "In the News" article, macroprudential tools

Accepted Answer

A)   allow a central bank to alter lending for specific industries.
B)   allow a central bank to alter taxes.
C)   limit a central bank's power to act independently of the political process.
D)   limit the policy tools available to a central bank.E) C) and D)
F) A) and B)

Question 13

Figure 33-7. 
-Refer to Stock Market Boom 2015. How is the new long-run equilibrium different from the original one?

Accepted Answer

A)   the price level and real GDP are higher
B)   the price level and real GDP are lower.
C)   the price level is higher and real GDP is the same.
D)   the price level is the same and real GDP is higher.E) A) and D)
F) B) and C)

Question 14

Other things the same, if prices fell when firms and workers were expecting them to rise, then

Accepted Answer

A)   employment and production would rise.
B)   employment would rise and production would fall.
C)   employment would fall and production would rise.
D)   employment and production would fall.E) B) and C)
F) A) and B)

Question 15

Other things the same, what happens to the price level and the quantity of output when the short run aggregate supply curve shifts to the right?

Accepted Answer

The price ...

Question 16

Figure 33-7. 
-Refer to Financial Crisis. How is the new long-run equilibrium different from the original one?

Accepted Answer

A)   both price and real GDP are higher.
B)   both price and real GDP are lower.
C)   the price level is the same and GDP is lower.
D)   the price level is lower and real GDP is the same.E) A) and D)
F) B) and C)

Question 17

The aggregate-demand curve shows that a decrease in the price level

Accepted Answer

A)   decreases the dollar value of goods and services demanded in the economy.
B)   decreases the real value of goods and services demanded in the economy.
C)   increases the dollar value of goods and services demanded in the economy.
D)   increases the real value of goods and services demanded in the economy.E) A) and B)
F) A) and C)

Question 18

When the price level falls, people want to

Accepted Answer

A)   hold more money and the quantity of aggregate goods and services demanded increases.
B)   hold more money and the quantity of aggregate goods and services demanded decreases.
C)   hold less money and the quantity of aggregate goods and services demanded increases.
D)   hold less money and the quantity of aggregate goods and services demanded decreases.E) All of the above
F) B) and D)

Question 19

Which of the following shifts short-run, but not long-run aggregate supply right?

Accepted Answer

A)   a decrease in the actual price level
B)   a decrease in the expected price level
C)   a decrease in the capital stock
D)   an increase in the money supplyE) B) and D)
F) None of the above

Question 20

Suppose the economy is in long-run equilibrium. If the government increases its expenditures, eventually the increase in aggregate demand causes price expectations to

Accepted Answer

A)   rise. This rise in price expectations shifts the short-run aggregate supply curve to the right.
B)   rise. This rise in price expectations shifts the short-run aggregate supply curve to the left.
C)   fall. This fall in price expectations shifts the short-run aggregate supply curve to the right.
D)   fall. This fall in price expectations shifts the short-run aggregate supply curve to the left.E) C) and D)
F) A) and B)

Exam 20: Aggregate Demand and Aggregate Supply

Suppose the economy is in long-run equilibrium. If the government increases its expenditures, eventually the increase in aggregate demand causes price expectations to

Correct AnswerverifiedShow Answer

Figure 33-13. -Refer to Figure 33-13. Identify the price and output levels consistent with long-run equilibrium.

Correct AnswerverifiedShow Answer

The aggregate-demand curve shows that a decrease in the price level

Correct AnswerverifiedShow Answer

When the price level changes, which of the following variables will change and thereby cause a change in the aggregate quantity of goods and services demanded?

Correct AnswerverifiedShow Answer

When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production?

Correct AnswerverifiedShow Answer

If there are sticky wages, and the price level is greater than what was expected, then

Correct AnswerverifiedShow Answer

The model of aggregate demand and aggregate supply explains the relationship between

Correct AnswerverifiedShow Answer

Figure 33-7. -Refer to Financial Crisis. How is the new long-run equilibrium different from the original one?

Correct AnswerverifiedShow Answer

Historically, as recessions have ended the unemployment rate declined

Correct AnswerverifiedShow Answer

If the actual price level is 165, but people had been expecting it to be 160, then

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve shifts right if

Correct AnswerverifiedShow Answer

When the price level falls, people want to

Correct AnswerverifiedShow Answer

According to the "In the News" article, macroprudential tools

Correct AnswerverifiedShow Answer

Other things the same, what happens to the price level and the quantity of output when the short run aggregate supply curve shifts to the right?

Correct AnswerverifiedThe price ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following shifts short-run, but not long-run aggregate supply right?

Correct AnswerverifiedShow Answer

Figure 33-7. -Refer to Stock Market Boom 2015. How is the new long-run equilibrium different from the original one?

Correct AnswerverifiedShow Answer

Other things the same, if prices fell when firms and workers were expecting them to rise, then

Correct AnswerverifiedShow Answer

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

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
The price ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified