Question 1

Stagflation exists when prices

Accepted Answer

A)   and output rise.
B)   rise and output falls.
C)   fall and output rises.
D)   and output fall.E) A) and C)
F) B) and C)

Question 2

Which of the following lists includes only changes that shift aggregate demand to the right?

Accepted Answer

A)   repeal of an investment tax credit,an increase in the money supply
B)   repeal of an investment tax credit,a decrease in the money supply
C)   passing of an investment tax credit,an increase in the money supply
D)   passing of an investment tax credit,a decrease in the money supplyE) A) and C)
F) None of the above

Question 3

When the price level increases,the real value of people's money holdings

Accepted Answer

A)   falls,so they buy more.
B)   falls,so they buy less.
C)   rises,so they buy more.
D)   rises,so they buy less.E) C) and D)
F) B) and D)

Question 4

Figure 20-2. 
-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.E) A) and B)
F) None of the above

Question 5

When the dollar depreciates,U.S.

Accepted Answer

A)   exports and imports increase.
B)   exports increase,while imports decrease.
C)   exports decrease,while imports increase.
D)   exports and imports decrease.E) B) and C)
F) All of the above

Question 6

Other things the same,when the price level rises more than expected,some firms will have

Accepted Answer

A)   higher than desired prices which increases their sales.
B)   higher than desired prices which depresses their sales.
C)   lower than desired prices which increases their sales.
D)   lower than desired prices which depresses their sales.E) A) and C)
F) C) and D)

Question 7

Which of the following would increase output in the short run?

Accepted Answer

A)   an increase in stock prices makes people feel wealthier
B)   government spending increases
C)   firms chose to purchase more investment goods
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 8

A decrease in what variable will raise the quantity of goods and services supplied,and shift only the short run aggregate supply curve to the right?

Accepted Answer

The expect...

Question 9

When output rises,unemployment falls.

Accepted Answer

A) True 
 B)False

Question 10

The short-run effects of an increase in the expected price level include

Accepted Answer

A)   a lower level of output and a lower price level.
B)   a lower level of output and a higher price level.
C)   a higher level of output and a lower price level.
D)   a higher level of output and a higher price level.E) C) and D)
F) A) and D)

Question 11

The aggregate-demand curve

Accepted Answer

A)   has a slope that is explained in the same way as the slope of the demand curve for a particular product.
B)   is vertical in the long run.
C)   shows an inverse relation between the price level and the quantity of all goods and services demanded.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 12

Figure 20-2. 
-Refer to Figure 20-2.Starting from point B and assuming that aggregate demand is held constant,in the long run the economy is likely to experience

Accepted Answer

A)   a falling price level and a falling level of output.
B)   a falling price level and a rising level of output.
C)   a rising price level and a falling level of output.
D)   a rising price level and a rising level of output.E) A) and B)
F) None of the above

Question 13

Other things the same,as the price level falls,

Accepted Answer

A)   the money supply falls.
B)   interest rates rise.
C)   a dollar buys more domestic goods.
D)   the aggregate-demand curve shifts right.E) A) and D)
F) A) and C)

Question 14

Which of the following rises when the U.S.price level falls?

Accepted Answer

A)   interest rates
B)   the value of the dollar in the market for foreign-currency exchange
C)   real wealth
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 15

The long-run aggregate supply curve shifts right if

Accepted Answer

A)   technology improves.
B)   the price level decreases.
C)   the money supply increases.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 16

If the economy is initially at long-run equilibrium and aggregate demand declines,then in the long run the price level

Accepted Answer

A)   and output are higher than in the original long-run equilibrium.
B)   and output are lower than in the original long-run equilibrium.
C)   is lower and output is the same as the original long-run equilibrium.
D)   is the same and output is lower than in the original long-run equilibrium.E) C) and D)
F) A) and C)

Question 17

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Accepted Answer

A) True 
 B)False

Question 18

If aggregate demand shifts left,then in the short run

Accepted Answer

A)   the price level and real GDP both rise.
B)   the price level rises and real GDP falls.
C)   the price level falls and real GDP rises.
D)   the price and real GDP both fall.E) C) and D)
F) B) and C)

Question 19

If the central bank increased the money supply in response to a decrease in short-run aggregate supply,unemployment would return towards its natural rate,but prices would rise even more.

Accepted Answer

A) True 
 B)False

Question 20

Other things the same,when the government spends more,the initial effect is that

Accepted Answer

A)   aggregate demand shifts right.
B)   aggregate demand shifts left.
C)   aggregate supply shifts right.
D)   aggregate supply shifts left.E) A) and B)
F) None of the above

Exam 33: Aggregate Demand and Aggregate Supply

Which of the following lists includes only changes that shift aggregate demand to the right?

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Stagflation exists when prices

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If the economy is initially at long-run equilibrium and aggregate demand declines,then in the long run the price level

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Figure 20-2. -Refer to Figure 20-2.Starting from point B and assuming that aggregate demand is held constant,in the long run the economy is likely to experience

Correct AnswerverifiedShow Answer

If aggregate demand shifts left,then in the short run

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The long-run aggregate supply curve shifts right if

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Other things the same,when the price level rises more than expected,some firms will have

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If the central bank increased the money supply in response to a decrease in short-run aggregate supply,unemployment would return towards its natural rate,but prices would rise even more.

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When output rises,unemployment falls.

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Other things the same,when the government spends more,the initial effect is that

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Figure 20-2. -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

When the dollar depreciates,U.S.

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Which of the following would increase output in the short run?

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The short-run effects of an increase in the expected price level include

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Which of the following rises when the U.S.price level falls?

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All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

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A decrease in what variable will raise the quantity of goods and services supplied,and shift only the short run aggregate supply curve to the right?

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The aggregate-demand curve

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When the price level increases,the real value of people's money holdings

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Other things the same,as the price level falls,

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The expect...
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