Question 1

Aggregate supply can be thought of as

Accepted Answer

A) a fixed amount of output. 
B) unrelated to the price level. 
C) a schedule of output at different price levels. 
D) the volume of goods at the ends of the production possibilities curve. 
A) a fixed amount of output. 
B) unrelated to the price level. 
C) a schedule of output at different price levels. 
D) the volume of goods at the ends of the production possibilities curve.

Question 2

Wages are the major element of cost in the economy accounting for about 70 percent of all input costs.

Accepted Answer

A) True 
 B)False

Question 3

The concept of aggregate supply refers to a

Accepted Answer

A) fixed number of output. 
B) list of products demanded. 
C) schedule of output. 
D) schedule of production costs. 
A) fixed number of output. 
B) list of products demanded. 
C) schedule of output. 
D) schedule of production costs.

Question 4

The post-World War II record shows that recessionary gaps may be long-lasting because ____ tends not to occur.

Accepted Answer

A) deflation 
B) reflation 
C) stagflation 
D) disinflation 
A) deflation 
B) reflation 
C) stagflation 
D) disinflation

Question 5

Figure 10-9
​  
-Figure 10-9 describes which of the following periods in the United States?

Accepted Answer

A) 1930s 
B) 1973-1975 
C) late 1990s 
D) 2007-2009 
A) 1930s 
B) 1973-1975 
C) late 1990s 
D) 2007-2009

Question 6

Stagflation may follow an inflationary boom.

Accepted Answer

A) True 
 B)False

Question 7

A common error of business managers is to blame inflation on

Accepted Answer

A) consumer spending. 
B) rising wages. 
C) rising prices. 
D) rising interest rates. 
E) rising unemployment. 
A) consumer spending. 
B) rising wages. 
C) rising prices. 
D) rising interest rates. 
E) rising unemployment.

Question 8

During 2008-2010, the U.S.economy showed signs of a(n)

Accepted Answer

A) mild recession. 
B) recessionary gap. 
C) inflationary gap. 
D) deflationary gap. 
A) mild recession. 
B) recessionary gap. 
C) inflationary gap. 
D) deflationary gap.

Question 9

If resource prices are fixed and the selling price rises, then

Accepted Answer

A) profits will decrease. 
B) profits will increase. 
C) profits will remain constant. 
D) both profits and output will decrease. 
A) profits will decrease. 
B) profits will increase. 
C) profits will remain constant. 
D) both profits and output will decrease.

Question 10

To calculate a firm's per unit of output profit, it is necessary to subtract

Accepted Answer

A) price from cost per unit. 
B) price from resource costs. 
C) cost per unit from product price. 
D) cost per unit from cost of resources. 
A) price from cost per unit. 
B) price from resource costs. 
C) cost per unit from product price. 
D) cost per unit from cost of resources.

Question 11

When equilibrium GDP is below potential GDP, jobs are

Accepted Answer

A) plentiful and unemployment is low. 
B) plentiful and unemployment is high. 
C) scarce and unemployment is high. 
D) scarce and unemployment is low. 
A) plentiful and unemployment is low. 
B) plentiful and unemployment is high. 
C) scarce and unemployment is high. 
D) scarce and unemployment is low.

Question 12

As the slope of the aggregate supply curve increases, this indicates that

Accepted Answer

A) the economy is getting close to potential GDP. 
B) the economy is reducing employment. 
C) inflation will be less of a problem. 
D) output is falling. 
A) the economy is getting close to potential GDP. 
B) the economy is reducing employment. 
C) inflation will be less of a problem. 
D) output is falling.

Question 13

Aggregate supply grows over time because of growing consumer and government spending.

Accepted Answer

A) True 
 B)False

Question 14

If the price level falls, what will happen to the aggregate supply curve?

Accepted Answer

A) It will shift outward. 
B) It will shift inward. 
C) Nothing. 
D) It will get steeper. 
E) It will get flatter. 
A) It will shift outward. 
B) It will shift inward. 
C) Nothing. 
D) It will get steeper. 
E) It will get flatter.

Question 15

College graduates looking for jobs were less fortunate in 2010 than graduates in 2018.

Accepted Answer

A) True 
 B)False

Question 16

The model of aggregate demand and aggregate supply explains the relation between

Accepted Answer

A) price and quantity of a particular good. 
B) unemployment and real output. 
C) wages and unemployment rate. 
D) real GDP and the price level. 
A) price and quantity of a particular good. 
B) unemployment and real output. 
C) wages and unemployment rate. 
D) real GDP and the price level.

Question 17

Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power.

Accepted Answer

A) True 
 B)False

Question 18

The example of an inflationary gap in 2006-2007 suggested that the economy adjusts

Accepted Answer

A) rapidly to inflationary gaps by lowering prices. 
B) rapidly to inflationary gaps by raising prices. 
C) slowly to inflationary gaps by lowering prices. 
D) slowly to inflationary gaps by increasing inflation. 
A) rapidly to inflationary gaps by lowering prices. 
B) rapidly to inflationary gaps by raising prices. 
C) slowly to inflationary gaps by lowering prices. 
D) slowly to inflationary gaps by increasing inflation.

Question 19

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

Accepted Answer

A) shifted aggregate supply left. 
B) caused the U.S.prices to fall. 
C) shifted aggregate supply right. 
D) All of these responses are correct.. 
A) shifted aggregate supply left. 
B) caused the U.S.prices to fall. 
C) shifted aggregate supply right. 
D) All of these responses are correct..

Question 20

Recessionary gaps usually lead to

Accepted Answer

A) structural unemployment. 
B) cyclical unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
A) structural unemployment. 
B) cyclical unemployment. 
C) seasonal unemployment. 
D) frictional unemployment.

Exam 26: Bringing in the Supply Side: Unemployment and Inflation

Aggregate supply can be thought of as

Wages are the major element of cost in the economy accounting for about 70 percent of all input costs.

The concept of aggregate supply refers to a

The post-World War II record shows that recessionary gaps may be long-lasting because ____ tends not to occur.

Figure 10-9 ​ -Figure 10-9 describes which of the following periods in the United States?

Stagflation may follow an inflationary boom.

A common error of business managers is to blame inflation on

During 2008-2010, the U.S.economy showed signs of a(n)

If resource prices are fixed and the selling price rises, then

To calculate a firm's per unit of output profit, it is necessary to subtract

When equilibrium GDP is below potential GDP, jobs are

As the slope of the aggregate supply curve increases, this indicates that

Aggregate supply grows over time because of growing consumer and government spending.

If the price level falls, what will happen to the aggregate supply curve?

College graduates looking for jobs were less fortunate in 2010 than graduates in 2018.

The model of aggregate demand and aggregate supply explains the relation between

Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power.

The example of an inflationary gap in 2006-2007 suggested that the economy adjusts

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

Recessionary gaps usually lead to

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

Filters

Figure 10-9 -Figure 10-9 describes which of the following periods in the United States?