Question 1

Figure 33-2.  
-Refer to Figure 33-2. Line X is

Accepted Answer

A) investment spending. 
B) real GDP. 
C) unemployment rate. 
D) CPI. 
A) investment spending. 
B) real GDP. 
C) unemployment rate. 
D) CPI.

Question 2

An economic expansion caused by a shift in aggregate demand remedies itself over time as the expected price level

Accepted Answer

A) falls, shifting aggregate demand right. 
B) rises, shifting aggregate demand left. 
C) falls, shifting aggregate supply right. 
D) rises, shifting aggregate supply left. 
A) falls, shifting aggregate demand right. 
B) rises, shifting aggregate demand left. 
C) falls, shifting aggregate supply right. 
D) rises, shifting aggregate supply left.

Question 3

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

Question 4

When the dollar depreciates, each dollar buys

Accepted Answer

A) more foreign currency, and so buys more foreign goods. 
B) more foreign currency, and so buys fewer foreign goods. 
C) less foreign currency, and so buys more foreign goods. 
D) less foreign currency, and so buys fewer foreign goods. 
A) more foreign currency, and so buys more foreign goods. 
B) more foreign currency, and so buys fewer foreign goods. 
C) less foreign currency, and so buys more foreign goods. 
D) less foreign currency, and so buys fewer foreign goods.

Question 5

Consider the exhibit below for the following questions.
Figure 33-4  
-Refer to Figure 33-4. If the economy starts at A and there is a fall in aggregate demand, the economy moves

Accepted Answer

A) back to A in the long run. 
B) to B in the long run. 
C) to C in the long run. 
D) to D in the long run. 
A) back to A in the long run. 
B) to B in the long run. 
C) to C in the long run. 
D) to D in the long run.

Question 6

The aggregate demand and aggregate supply graph has

Accepted Answer

A) the price level on the horizontal axis. The price level can be measured by the GDP deflator. 
B) the price level on the horizontal axis. The price level can be measured by real GDP. 
C) the price level on the vertical axis. The price level can be measured by the GDP deflator. 
D) the price level on the vertical axis. The price level can be measured by GDP. 
A) the price level on the horizontal axis. The price level can be measured by the GDP deflator. 
B) the price level on the horizontal axis. The price level can be measured by real GDP. 
C) the price level on the vertical axis. The price level can be measured by the GDP deflator. 
D) the price level on the vertical axis. The price level can be measured by GDP.

Question 7

Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? If the government does nothing, what ensures that the economy still eventually gets back to the natural rate of output?

Accepted Answer

A decrease in aggregate demand causes th

Question 8

Which of the following is correct?

Accepted Answer

A) Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with a much accuracy. 
B) Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy. 
C) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy. 
D) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy. 
A) Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with a much accuracy. 
B) Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy. 
C) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy. 
D) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.

Question 9

When the dollar appreciates, U.S.

Accepted Answer

A) net exports rise, which increases the aggregate quantity of goods and services demanded. 
B) net exports rise, which decreases the aggregate quantity of goods and services demanded. 
C) net exports fall, which increases the aggregate quantity of goods and services demanded. 
D) net exports fall, which decreases the aggregate quantity of goods and services demanded. 
A) net exports rise, which increases the aggregate quantity of goods and services demanded. 
B) net exports rise, which decreases the aggregate quantity of goods and services demanded. 
C) net exports fall, which increases the aggregate quantity of goods and services demanded. 
D) net exports fall, which decreases the aggregate quantity of goods and services demanded.

Question 10

Most economist agree that money changes real GDP in both the short and long run.

Accepted Answer

A) True 
 B)False

Question 11

In the mid-1970s the price of oil rose dramatically. This

Accepted Answer

A) shifted aggregate supply left, the price level rose, and real GDP fell. 
B) caused U.S. prices to fall, and real GDP rose. 
C) caused an increase in U.S. prices and real GDP. 
D) caused a decrease in U.S. prices and real GDP. 
A) shifted aggregate supply left, the price level rose, and real GDP fell. 
B) caused U.S. prices to fall, and real GDP rose. 
C) caused an increase in U.S. prices and real GDP. 
D) caused a decrease in U.S. prices and real GDP.

Question 12

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

Question 13

The effect of a change in the value of the dollar in the foreign exchange market due to a change in the price level helps explain the slope of aggregate demand, but does not shift it. The effects of a change in the value of the dollar in the foreign exchange market due to speculation is shown by shifting the aggregate demand curve.

Accepted Answer

A) True 
 B)False

Question 14

The long-run aggregate supply curve would shift right if the government were to

Accepted Answer

A) reduce the minimum-wage. 
B) make unemployment benefits more generous. 
C) raise taxes on investment spending. 
D) All of the above are correct. 
A) reduce the minimum-wage. 
B) make unemployment benefits more generous. 
C) raise taxes on investment spending. 
D) All of the above are correct.

Question 15

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

Question 16

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. 
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.

Question 17

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

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. 
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.

Question 18

Figure 33-3.  
-Refer to Figure 33-3. The natural rate of output occurs at

Accepted Answer

A) Y1. 
B) Y2. 
C) Y3. 
D) both Y1 and Y3. 
A) Y1. 
B) Y2. 
C) Y3. 
D) both Y1 and Y3.

Question 19

If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds

Accepted Answer

A) the dollar would appreciate which would cause aggregate demand to shift right. 
B) the dollar would appreciate which would cause aggregate demand to shift left. 
C) the dollar would depreciate which would cause aggregate demand to shift right. 
D) the dollar would depreciate which would cause aggregate demand to shift left. 
A) the dollar would appreciate which would cause aggregate demand to shift right. 
B) the dollar would appreciate which would cause aggregate demand to shift left. 
C) the dollar would depreciate which would cause aggregate demand to shift right. 
D) the dollar would depreciate which would cause aggregate demand to shift left.

Question 20

The term ​business cycle​ implies that economic fluctuations follow a regular, predictable pattern.​

Accepted Answer

A) True 
 B)False

Exam 33: Aggregate Demand and Aggregate Supply

Figure 33-2. -Refer to Figure 33-2. Line X is

An economic expansion caused by a shift in aggregate demand remedies itself over time as the expected price level

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

When the dollar depreciates, each dollar buys

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4. If the economy starts at A and there is a fall in aggregate demand, the economy moves

The aggregate demand and aggregate supply graph has

Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? If the government does nothing, what ensures that the economy still eventually gets back to the natural rate of output?

Which of the following is correct?

When the dollar appreciates, U.S.

Most economist agree that money changes real GDP in both the short and long run.

In the mid-1970s the price of oil rose dramatically. This

The long-run aggregate supply curve shifts right if

The long-run aggregate supply curve would shift right if the government were to

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

If aggregate demand shifts left, then in the short run

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

Figure 33-3. -Refer to Figure 33-3. The natural rate of output occurs at

If speculators lost confidence in foreign economies and so wanted to buy more U.S. bonds

The term ​business cycle​ implies that economic fluctuations follow a regular, predictable pattern.​

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

The term business cycle implies that economic fluctuations follow a regular, predictable pattern.