Question 1

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 above 
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 above

Question 2

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 3

Figure 33-5.  
-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. 
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.

Question 4

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 States 
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 States

Question 5

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. 
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.

Question 6

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. 
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.

Question 7

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 8

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

Question 9

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

Question 10

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. 
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.

Question 11

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. 
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.

Question 12

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. 
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.

Question 13

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 level 
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 level

Question 14

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. 
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 15

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. 
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.

Question 16

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 17

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 18

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

Accepted Answer

The price

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. 
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.

Question 20

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. 
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.

Exam 33: Aggregate Demand and Aggregate Supply

The recession of 2008-2009 was preceded by

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

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

Which of the following is not included in aggregate demand?

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

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

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

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

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

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

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

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

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

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

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?

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.

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

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

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

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

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

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