Question 1

In 2008, Germany passed a stimulus package of $29 billion as its economy slowed. This policy action follows the ________ to restore full employment.

Accepted Answer

A)  Keynesian viewpoint that supports increases in federal government expenditure 
B)  Keynesian viewpoint that supports increases in the money supply 
C)  monetarist viewpoint that supports increases in expenditure by the federal government 
D)  new classical viewpoint that discourages the use of expenditure by the federal government 
A)  Keynesian viewpoint that supports increases in federal government expenditure 
B)  Keynesian viewpoint that supports increases in the money supply 
C)  monetarist viewpoint that supports increases in expenditure by the federal government 
D)  new classical viewpoint that discourages the use of expenditure by the federal government

Question 2

Economic growth

Accepted Answer

A)  occurs when the long-run aggregate supply curve shifts upward. 
B)  is an increase in potential GDP as the long-run aggregate supply curve shifts rightward. 
C)  requires a compensating decrease in aggregate demand to offset the increase in aggregate supply. 
D)  All of the above answers are correct. 
A)  occurs when the long-run aggregate supply curve shifts upward. 
B)  is an increase in potential GDP as the long-run aggregate supply curve shifts rightward. 
C)  requires a compensating decrease in aggregate demand to offset the increase in aggregate supply. 
D)  All of the above answers are correct.

Question 3

If the money prices of resources changes, the LAS curve shifts.

Accepted Answer

A) True 
 B)False

Question 4

-Based on the data in the table above, the economy will be in short-run equilibrium at a price level of

Accepted Answer

A)  90. 
B)  110. 
C)  100. 
D)  120. 
A)  90. 
B)  110. 
C)  100. 
D)  120.

Question 5

A recessionary gap occurs when

Accepted Answer

A)  real GDP is less than potential GDP. 
B)  nominal GDP is less than potential GDP. 
C)  high rates of inflation occur. 
D)  nominal GDP is greater than potential GDP. 
A)  real GDP is less than potential GDP. 
B)  nominal GDP is less than potential GDP. 
C)  high rates of inflation occur. 
D)  nominal GDP is greater than potential GDP.

Question 6

-The reason that it is possible for the economy in the above figure to be at equilibrium point E? rather than at equilibrium point E? is that

Accepted Answer

A)  in the long run there is always less than full employment. 
B)  in the short run the economy can produce more than it can in a long-run situation. 
C)  AD always shifts rightward and never shifts leftward. 
D)  the economy must be in a recession. 
A)  in the long run there is always less than full employment. 
B)  in the short run the economy can produce more than it can in a long-run situation. 
C)  AD always shifts rightward and never shifts leftward. 
D)  the economy must be in a recession.

Question 7

Which of the following changes would NOT shift the aggregate demand curve?

Accepted Answer

A)  a change in fiscal policy 
B)  a change in monetary policy 
C)  a change in expectations about future income 
D)  an increase in technology 
A)  a change in fiscal policy 
B)  a change in monetary policy 
C)  a change in expectations about future income 
D)  an increase in technology

Question 8

Suppose the price level rises and the money wage remains constant. 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 leftward shift of the SAS curve. 
D)  a leftward shift of the SAS curve and the LAS curve. 
A)  an upward movement along the LAS curve. 
B)  an upward movement along the SAS curve. 
C)  a leftward shift of the SAS curve. 
D)  a leftward shift of the SAS curve and the LAS curve.

In 2008, Germany passed a stimulus package of $29 billion as its economy slowed. This policy action follows the ________ to restore full employment.

Economic growth

If the money prices of resources changes, the LAS curve shifts.

-Based on the data in the table above, the economy will be in short-run equilibrium at a price level of

A recessionary gap occurs when

-The reason that it is possible for the economy in the above figure to be at equilibrium point E? rather than at equilibrium point E? is that

Which of the following changes would NOT shift the aggregate demand curve?

Suppose the price level rises and the money wage remains constant. This set of changes leads to

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 10: Aggregate Supply and Aggregate Demand

In 2008, Germany passed a stimulus package of $29 billion as its economy slowed. This policy action follows the ________ to restore full employment.

Economic growth

If the money prices of resources changes, the LAS curve shifts.

-Based on the data in the table above, the economy will be in short-run equilibrium at a price level of

A recessionary gap occurs when

-The reason that it is possible for the economy in the above figure to be at equilibrium point E? rather than at equilibrium point E? is that

Which of the following changes would NOT shift the aggregate demand curve?

Suppose the price level rises and the money wage remains constant. This set of changes leads to

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters