Question 1

The AS/AD model studies the relationship between

Accepted Answer

A)  unemployment and real GDP. 
B)  the price level and unemployment. 
C)  the price level and real GDP. 
D)  nominal GDP and inflation. 
A)  unemployment and real GDP. 
B)  the price level and unemployment. 
C)  the price level and real GDP. 
D)  nominal GDP and inflation.

Question 2

An increase in the level of technology shifts

Accepted Answer

A)  the LAS curve rightward but leaves the SAS curve unchanged. 
B)  the SAS curve rightward but leaves the LAS unchanged. 
C)  both the SAS and LAS curves leftward. 
D)  both the SAS and LAS curves rightward. 
A)  the LAS curve rightward but leaves the SAS curve unchanged. 
B)  the SAS curve rightward but leaves the LAS unchanged. 
C)  both the SAS and LAS curves leftward. 
D)  both the SAS and LAS curves rightward.

Question 3

An increase in the quantity of money shifts the aggregate demand curve rightward.

Accepted Answer

A) True 
 B)False

Question 4

In the short-run

Accepted Answer

A)  the price level does not change. 
B)  the aggregate supply curve is upward sloping. 
C)  the money wage rate can change. 
D)  real GDP is always equal to potential GDP. 
A)  the price level does not change. 
B)  the aggregate supply curve is upward sloping. 
C)  the money wage rate can change. 
D)  real GDP is always equal to potential GDP.

Question 5

As world economies start to recover from the 2008 financial crisis and firms expect profits to increase,

Accepted Answer

A)  investment will increase and there will be a movement up along the aggregate demand curve. 
B)  both investment and aggregate demand will increase. 
C)  the price level in the U.S. will decrease as firms increase investment. 
D)  the U.S. short-run aggregate supply curve immediately will shift rightward. 
A)  investment will increase and there will be a movement up along the aggregate demand curve. 
B)  both investment and aggregate demand will increase. 
C)  the price level in the U.S. will decrease as firms increase investment. 
D)  the U.S. short-run aggregate supply curve immediately will shift rightward.

Question 6

Fluctuations in aggregate demand and aggregate supply explain why real GDP fluctuates.)

Accepted Answer

A) True 
 B)False

Question 7

The aggregate demand curve

Accepted Answer

A)  shifts rightward when taxes are decreased. 
B)  shifts rightward when foreign incomes decrease and shifts leftward when foreign incomes increase. 
C)  shifts rightward when the price level increases and leftward when the price level falls. 
D)  does not shift, unlike market demand curves. 
A)  shifts rightward when taxes are decreased. 
B)  shifts rightward when foreign incomes decrease and shifts leftward when foreign incomes increase. 
C)  shifts rightward when the price level increases and leftward when the price level falls. 
D)  does not shift, unlike market demand curves.

Question 8

-In the above figure, which point corresponds to an increase in technology?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 9

-In the above figure, which movement illustrates the impact of the price level and money wage rate falling at the same rate?

Accepted Answer

A)  E to H 
B)  E to J 
C)  E to G 
D)  E to K 
A)  E to H 
B)  E to J 
C)  E to G 
D)  E to K

Question 10

A below full-employment equilibrium

Accepted Answer

A)  occurs when the price level is rising very quickly. 
B)  occurs when real GDP is less than potential GDP. 
C)  occurs when real GDP exceeds potential GDP. 
D)  is not possible in the U.S. economy. 
A)  occurs when the price level is rising very quickly. 
B)  occurs when real GDP is less than potential GDP. 
C)  occurs when real GDP exceeds potential GDP. 
D)  is not possible in the U.S. economy.

Question 11

Economic growth is best defined as

Accepted Answer

A)  rightward shifts of the AD curve. 
B)  increases in potential GDP. 
C)  decreases in potential GDP. 
D)  rightward shifts of the SAS curve. 
A)  rightward shifts of the AD curve. 
B)  increases in potential GDP. 
C)  decreases in potential GDP. 
D)  rightward shifts of the SAS curve.

Question 12

Which of the following does NOT shift the aggregate demand curve?

Accepted Answer

A)  an increase in current foreign income 
B)  a decrease in the quantity of money 
C)  an increase in the price level 
D)  an increase in peopleʹs expected future incomes 
A)  an increase in current foreign income 
B)  a decrease in the quantity of money 
C)  an increase in the price level 
D)  an increase in peopleʹs expected future incomes

Question 13

The aggregate demand curve shows the__________ relationship between the price level and________

Accepted Answer

A)  positive; the quantity of real GDP demanded 
B)  negative; aggregate labor demanded 
C)  negative; the quantity of real GDP demanded 
D)  positive; aggregate labor demand 
A)  positive; the quantity of real GDP demanded 
B)  negative; aggregate labor demanded 
C)  negative; the quantity of real GDP demanded 
D)  positive; aggregate labor demand

Question 14

The aggregate demand curve shows

Accepted Answer

A)  the quantity of real GDP demanded at different price levels. 
B)  that real income is directly positively) related to the price level. 
C)  total expenditures at different levels of national income. 
D)  All of the above answers are correct. 
A)  the quantity of real GDP demanded at different price levels. 
B)  that real income is directly positively) related to the price level. 
C)  total expenditures at different levels of national income. 
D)  All of the above answers are correct.

Question 15

curve.
  
-The figure above illustrates aggregate demand and aggregate supply in Sparta. Spartaʹs price level will rise above 100 if ___________.

Accepted Answer

A)  government expenditure decreases 
B)  the quantity of money increases 
C)  taxes increase 
D)  the quantity of capital increases 
A)  government expenditure decreases 
B)  the quantity of money increases 
C)  taxes increase 
D)  the quantity of capital increases

Question 16

The aggregate demand curve shows total expenditures at different levels of national income.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following events will increase short-run aggregate supply?

Accepted Answer

A)  an advance in technology 
B)  an increase in foreign income 
C)  an increase in resource prices 
D)  an increase in the natural unemployment rate 
A)  an advance in technology 
B)  an increase in foreign income 
C)  an increase in resource prices 
D)  an increase in the natural unemployment rate

Question 18

Suppose the price level, the money wage, and the price of all other resources rise by 10 percent. This set of changes leads to

Accepted Answer

A)  an upward movement along the LAS curve. 
B)  an upward movement along the SAS curve. 
C)  a downward movement along the LAS curve. 
D)  a leftward shift of the LAS curve. 
A)  an upward movement along the LAS curve. 
B)  an upward movement along the SAS curve. 
C)  a downward movement along the LAS curve. 
D)  a leftward shift of the LAS curve.

Question 19

Which of the following shifts the aggregate demand curve leftward?

Accepted Answer

A)  a decrease in taxes 
B)  an increase in consumption expenditures 
C)  a decrease in government expenditures on goods and services 
D)  an increase in net exports of goods and services 
A)  a decrease in taxes 
B)  an increase in consumption expenditures 
C)  a decrease in government expenditures on goods and services 
D)  an increase in net exports of goods and services

Question 20

Technological progress will

Accepted Answer

A)  shift the SAS curve rightward but will not shift the LAS curve. 
B)  shift both the LAS and SAS curves rightward. 
C)  not shift either the LAS or the SAS curve. 
D)  shift the LAS curve rightward but will not shift the SAS curve. 
A)  shift the SAS curve rightward but will not shift the LAS curve. 
B)  shift both the LAS and SAS curves rightward. 
C)  not shift either the LAS or the SAS curve. 
D)  shift the LAS curve rightward but will not shift the SAS curve.

The AS/AD model studies the relationship between

An increase in the level of technology shifts

An increase in the quantity of money shifts the aggregate demand curve rightward.

In the short-run

As world economies start to recover from the 2008 financial crisis and firms expect profits to increase,

Fluctuations in aggregate demand and aggregate supply explain why real GDP fluctuates.)

The aggregate demand curve

-In the above figure, which point corresponds to an increase in technology?

-In the above figure, which movement illustrates the impact of the price level and money wage rate falling at the same rate?

A below full-employment equilibrium

Economic growth is best defined as

Which of the following does NOT shift the aggregate demand curve?

The aggregate demand curve shows the__ relationship between the price level and

The aggregate demand curve shows

curve. -The figure above illustrates aggregate demand and aggregate supply in Sparta. Spartaʹs price level will rise above 100 if ___________.

The aggregate demand curve shows total expenditures at different levels of national income.

Which of the following events will increase short-run aggregate supply?

Suppose the price level, the money wage, and the price of all other resources rise by 10 percent. This set of changes leads to

Which of the following shifts the aggregate demand curve leftward?

Technological progress will

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 10: Aggregate Supply and Aggregate Demand

The AS/AD model studies the relationship between

An increase in the level of technology shifts

An increase in the quantity of money shifts the aggregate demand curve rightward.

In the short-run

As world economies start to recover from the 2008 financial crisis and firms expect profits to increase,

Fluctuations in aggregate demand and aggregate supply explain why real GDP fluctuates.)

The aggregate demand curve

-In the above figure, which point corresponds to an increase in technology?

-In the above figure, which movement illustrates the impact of the price level and money wage rate falling at the same rate?

A below full-employment equilibrium

Economic growth is best defined as

Which of the following does NOT shift the aggregate demand curve?

The aggregate demand curve shows the__________ relationship between the price level and________

The aggregate demand curve shows

curve. -The figure above illustrates aggregate demand and aggregate supply in Sparta. Spartaʹs price level will rise above 100 if ___________.

The aggregate demand curve shows total expenditures at different levels of national income.

Which of the following events will increase short-run aggregate supply?

Suppose the price level, the money wage, and the price of all other resources rise by 10 percent. This set of changes leads to

Which of the following shifts the aggregate demand curve leftward?

Technological progress will

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

The aggregate demand curve shows the__ relationship between the price level and