Question 1

Other things the same, when the price level falls, interest rates

Accepted Answer

A)  rise, which means consumers will want to spend more on homebuilding.
B)  rise, which means consumers will want to spend less on homebuilding.
C)  fall, which means consumers will want to spend more on homebuilding.
D)  fall, which means consumers will want to spend less on homebuilding.E) B) and C)
F) A) and D)

Question 2

Although wages, incomes, and interest rates are most often discussed in nominal terms, what matters most are their real values.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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) All of the above
F) A) and B)

Question 5

According to classical macroeconomic theory, changes in the money supply change real GDP but not the price level.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Other things the same, an increase in the price level makes the dollars people hold worth

Accepted Answer

A)  more, so they can buy more.
B)  more, so they can buy less.
C)  less, so they can buy more.
D)  less, so they can buy less.E) None of the above
F) All of the above

Question 8

The recession of 2008-2009 was preceded by

Accepted Answer

A)  a sharp decline in housing prices.
B)  large losses among financial institutions that owned mortgage-backed securities.
C)  rises in mortgage defaults and home foreclosures.
D)  all of the aboveE) None of the above
F) B) and D)

Question 9

Explain the short-run effects on output and the price level from a decrease in the aggregate-demand curve.

Accepted Answer

The price ...

Question 10

Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then

Accepted Answer

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

Question 11

Figure 33-5. 1 to SRAS2 A) could be caused by an outbreak of war in the Middle East. B) could be caused by a decrease in the expected price level. C) causes the economy to experience an increase in the unemployment rate. D) causes the economy to experience stagflation." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 33-5. The shift of the short-run aggregate-supply curve from SRAS1 to SRAS2

Accepted Answer

A)  could be caused by an outbreak of war in the Middle East.
B)  could be caused by a decrease in the expected price level.
C)  causes the economy to experience an increase in the unemployment rate.
D)  causes the economy to experience stagflation.E) A) and B)
F) None of the above

Question 12

What curve shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level?

Accepted Answer

The aggreg...

Question 13

An increase in the expected price level shifts short-run aggregate supply to the

Accepted Answer

A)  right, and an increase in the actual price level shifts short-run aggregate supply to the right.
B)  right, and an increase in the actual price level does not shift short-run aggregate supply.
C)  left, and an increase in the actual price level shifts short-run aggregate supply to the left.
D)  left, and an increase in the actual price level does not shift short-run aggregate supply.E) None of the above
F) A) and D)

Question 14

Which of the following is not included in aggregate demand?

Accepted Answer

A)  purchases of stock and bonds
B)  purchases of services such as visits to the doctor
C)  purchases of capital goods such as equipment in a factory
D)  purchases by foreigners of consumer goods produced in the United StatesE) A) and B)
F) A) and C)

Question 15

The equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level) , where a is a positive number, represents

Accepted Answer

A)  an upward-sloping short-run aggregate supply curve
B)  a vertical short-run aggregate supply curve
C)  a downward-sloping aggregate demand curve
D)  None of the above is correct.E) All of the above
F) A) and C)

Question 16

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 levelE) B) and C)
F) A) and B)

Question 17

Which of the following is included in the aggregate demand for goods and services?

Accepted Answer

A)  consumption demand
B)  investment demand
C)  net exports
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 18

Which of the following is a lesson concerning shifts in aggregate demand?

Accepted Answer

A)  they contribute to fluctuations in output.
B)  in the long-run they change real output, but not the price level.
C)  policymakers are unable to mitigate the severity of economic fluctuations.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 19

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) None of the above

Question 20

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

Accepted Answer

A)  an increase in the money supply
B)  an increase in the price level
C)  a decrease in the expected price level
D)  All of the above are correct.E) A) and D)
F) None of the above

Exam 33: Aggregate Demand and Aggregate Supply

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

Other things the same, an increase in the price level makes the dollars people hold worth

Correct AnswerverifiedShow Answer

Explain the short-run effects on output and the price level from a decrease in the aggregate-demand curve.

Correct AnswerverifiedThe price ...View AnswerShow Answer

An increase in the expected price level shifts short-run aggregate supply to the

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Which of the following is not included in aggregate demand?

Correct AnswerverifiedShow Answer

Which of the following is included in the aggregate demand for goods and services?

Correct AnswerverifiedShow Answer

Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then

Correct AnswerverifiedShow Answer

Although wages, incomes, and interest rates are most often discussed in nominal terms, what matters most are their real values.

Correct AnswerverifiedShow Answer

According to classical macroeconomic theory, changes in the money supply change real GDP but not the price level.

Correct AnswerverifiedShow Answer

Figure 33-5. -Refer to Figure 33-5. The shift of the short-run aggregate-supply curve from SRAS1 to SRAS2

Correct AnswerverifiedShow Answer

What curve shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level?

Correct AnswerverifiedThe aggreg...View AnswerShow Answer

Which of the following is a lesson concerning shifts in aggregate demand?

Correct AnswerverifiedShow Answer

The recession of 2008-2009 was preceded by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level) , where a is a positive number, represents

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Other things the same, when the price level falls, interest rates

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
The price ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 33-5. -Refer to Figure 33-5. The shift of the short-run aggregate-supply curve from SRAS₁ to SRAS₂

Correct Answer
verified

Correct Answer
verified
The aggreg...
View 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