Question 1

If wages are "sticky",a decline in the price level will

Accepted Answer

A)  raise the real wage and lower the quantity demanded of labor. 
B)  lower the real wage and lower the quantity supplied of labor. 
C)  raise the real wage and lower the quantity supplied of labor. 
D)  a and b 
E)  none of the above 
A)  raise the real wage and lower the quantity demanded of labor. 
B)  lower the real wage and lower the quantity supplied of labor. 
C)  raise the real wage and lower the quantity supplied of labor. 
D)  a and b 
E)  none of the above

Question 2

A business firm's profitability is based in part on the

Accepted Answer

A)  prices of their nonlabor inputs. 
B)  productivity of their workers. 
C)  wage rates they must pay their workers. 
D)  business taxes they must pay. 
E)  all of the above 
A)  prices of their nonlabor inputs. 
B)  productivity of their workers. 
C)  wage rates they must pay their workers. 
D)  business taxes they must pay. 
E)  all of the above

Question 3

As the U.S.dollar appreciates and the Japanese yen depreciates,

Accepted Answer

A)  U.S.-produced goods become more expensive for the Japanese and Japanese-produced goods become cheaper for Americans. 
B)  U.S.-produced goods become cheaper for the Japanese and Japanese-produced goods become more expensive for Americans. 
C)  U.S.-produced goods become cheaper for both the Japanese and Americans. 
D)  Japanese-produced goods become more expensive for both the Japanese and Americans. 
E)  none of the above 
A)  U.S.-produced goods become more expensive for the Japanese and Japanese-produced goods become cheaper for Americans. 
B)  U.S.-produced goods become cheaper for the Japanese and Japanese-produced goods become more expensive for Americans. 
C)  U.S.-produced goods become cheaper for both the Japanese and Americans. 
D)  Japanese-produced goods become more expensive for both the Japanese and Americans. 
E)  none of the above

Question 4

Suppose that a worker has the option of being paid in euros or dollars.It would be to the workers advantage if his employer pays him in ____________ rather than ______________ if the worker believes that the value of the dollar is about to ____________ relative to the value of the euro.

Accepted Answer

A)  euros; dollars; fall 
B)  dollars; euros; rise 
C)  euros; dollars; rise 
D)  dollars; euros; fall 
E)  ​a and b 
A)  euros; dollars; fall 
B)  dollars; euros; rise 
C)  euros; dollars; rise 
D)  dollars; euros; fall 
E)  ​a and b

Question 5

A rise in foreign real national income tends to raise U.S.__________,shifting the U.S.AD curve to the __________.

Accepted Answer

A)  exports; left 
B)  exports; right 
C)  imports; left 
D)  imports; right 
A)  exports; left 
B)  exports; right 
C)  imports; left 
D)  imports; right

Question 6

A decrease in the price of a nonlabor input such as machinery

Accepted Answer

A)  shifts the SRAS curve to the right. 
B)  shifts the SRAS curve to the left. 
C)  causes an upward movement along the existing SRAS curve. 
D)  causes a downward movement along the existing SRAS curve. 
E)  none of the above 
A)  shifts the SRAS curve to the right. 
B)  shifts the SRAS curve to the left. 
C)  causes an upward movement along the existing SRAS curve. 
D)  causes a downward movement along the existing SRAS curve. 
E)  none of the above

Question 7

Which set of changes is definitely predicted to lower Real GDP in the short run?

Accepted Answer

A)  The money supply rises and labor productivity rises. 
B)  The U.S.dollar depreciates and wage rates fall. 
C)  The U.S.dollar appreciates and labor productivity rises. 
D)  Foreign real national income falls and wage rates rise. 
E)  none of the above 
A)  The money supply rises and labor productivity rises. 
B)  The U.S.dollar depreciates and wage rates fall. 
C)  The U.S.dollar appreciates and labor productivity rises. 
D)  Foreign real national income falls and wage rates rise. 
E)  none of the above

Question 8

Which of the following statements represents a correct and sequentially accurate economic explanation?

Accepted Answer

A)  If government purchases rise,total expenditures on goods and services rises,and the AD curve shifts leftward. 
B)  If government purchases rise,total expenditures on goods and services rises,and the AD curve shifts rightward. 
C)  If consumption rises,total expenditures on goods and services rises,and the AD curve shifts rightward. 
D)  If consumption rises,total expenditures on goods and services rises,and the quantity demanded of Real GDP rises. 
E)  b and c 
A)  If government purchases rise,total expenditures on goods and services rises,and the AD curve shifts leftward. 
B)  If government purchases rise,total expenditures on goods and services rises,and the AD curve shifts rightward. 
C)  If consumption rises,total expenditures on goods and services rises,and the AD curve shifts rightward. 
D)  If consumption rises,total expenditures on goods and services rises,and the quantity demanded of Real GDP rises. 
E)  b and c

Question 9

Changes in which of the following factors can shift the AD curve?

Accepted Answer

A)  net exports 
B)  government purchases 
C)  the money supply 
D)  b and c 
E)  a,b,and c 
A)  net exports 
B)  government purchases 
C)  the money supply 
D)  b and c 
E)  a,b,and c

Question 10

Which of the following best describes how the real balance effect works?

Accepted Answer

A)  The price level falls,purchasing power rises,a person's monetary wealth rises,and the person buys fewer goods and services. 
B)  The price level rises,purchasing power rises,a person's monetary wealth decreases,and the person buys more goods and services. 
C)  The price level rises,purchasing power falls,a person's monetary wealth falls,and the person buys fewer goods and services. 
D)  The price level falls,purchasing power rises,a person's monetary wealth falls,and the person buys fewer goods and services. 
E)  none of the above 
A)  The price level falls,purchasing power rises,a person's monetary wealth rises,and the person buys fewer goods and services. 
B)  The price level rises,purchasing power rises,a person's monetary wealth decreases,and the person buys more goods and services. 
C)  The price level rises,purchasing power falls,a person's monetary wealth falls,and the person buys fewer goods and services. 
D)  The price level falls,purchasing power rises,a person's monetary wealth falls,and the person buys fewer goods and services. 
E)  none of the above

Question 11

-Refer to Exhibit 8-3.A movement from point A to point B on AD1 would have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an increase in income taxes. 
D)  a decrease in income taxes. 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an increase in income taxes. 
D)  a decrease in income taxes.

Question 12

-Refer to Exhibit 8-3.A shift in aggregate demand from AD1 to AD2 could have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  a decrease in interest rates (which was not prompted by a change in the price level). 
D)  an increase in interest rates (which was not prompted by a change in the price level). 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  a decrease in interest rates (which was not prompted by a change in the price level). 
D)  an increase in interest rates (which was not prompted by a change in the price level).

Question 13

If businesses are optimistic about future sales,the short-run aggregate supply curve will shift leftward.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to Exhibit 8-3.A shift in aggregate demand from AD2 to AD1 could have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  businesses become more optimistic about future sales. 
D)  businesses become more pessimistic about future sales. 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  businesses become more optimistic about future sales. 
D)  businesses become more pessimistic about future sales.

Question 15

A change in the quantity demanded of Real GDP is graphically represented as a

Accepted Answer

A)  shift in the AD curve. 
B)  movement from one point on the AD curve to another point on the same curve. 
C)  movement from a point on the AD curve to a point on the SRAS curve. 
D)  shift in the real balance effect curve. 
E)  shift in the interest rate effect curve. 
A)  shift in the AD curve. 
B)  movement from one point on the AD curve to another point on the same curve. 
C)  movement from a point on the AD curve to a point on the SRAS curve. 
D)  shift in the real balance effect curve. 
E)  shift in the interest rate effect curve.

Question 16

The real balance effect describes the change in

Accepted Answer

A)  checking account balances that occur when the money supply increases or decreases. 
B)  the value of physical assets (e.g.,houses)that results from a change in the price level. 
C)  the output producers produce as they attempt to balance their production in response to changes in consumers' demand. 
D)  the value of cash holdings that results from a change in the price level. 
E)  the balance of cash holdings that results from a change in the amount of income earned. 
A)  checking account balances that occur when the money supply increases or decreases. 
B)  the value of physical assets (e.g.,houses)that results from a change in the price level. 
C)  the output producers produce as they attempt to balance their production in response to changes in consumers' demand. 
D)  the value of cash holdings that results from a change in the price level. 
E)  the balance of cash holdings that results from a change in the amount of income earned.

Question 17

A rise in the price level prompts an increase in the demand for credit.This is relevant to the __________ effect.

Accepted Answer

A)  international trade 
B)  real balance 
C)  aggregate demand 
D)  interest rate 
E)  b and c 
A)  international trade 
B)  real balance 
C)  aggregate demand 
D)  interest rate 
E)  b and c

Question 18

Aggregate demand refers to the

Accepted Answer

A)  quantity demanded of all goods and services at various price levels,ceteris paribus. 
B)  quantity demanded of all goods and services at a particular price level,ceteris paribus. 
C)  quantity demanded of Real GDP at various price levels,ceteris paribus. 
D)  various amounts of GDP that are demanded at various price levels,ceteris paribus. 
E)  a and c 
A)  quantity demanded of all goods and services at various price levels,ceteris paribus. 
B)  quantity demanded of all goods and services at a particular price level,ceteris paribus. 
C)  quantity demanded of Real GDP at various price levels,ceteris paribus. 
D)  various amounts of GDP that are demanded at various price levels,ceteris paribus. 
E)  a and c

Question 19

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS2 to SRAS1 could have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an increase in wage rates. 
D)  a decrease in wage rates. 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an increase in wage rates. 
D)  a decrease in wage rates.

Question 20

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS1 to SRAS2 could have been the result of

Accepted Answer

A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an adverse supply shock. 
D)  a beneficial supply shock. 
A)  a decrease in the price level. 
B)  an increase in the price level. 
C)  an adverse supply shock. 
D)  a beneficial supply shock.

Exam 8: Production and Costs

If wages are "sticky",a decline in the price level will

A business firm's profitability is based in part on the

As the U.S.dollar appreciates and the Japanese yen depreciates,

Suppose that a worker has the option of being paid in euros or dollars.It would be to the workers advantage if his employer pays him in ____________ rather than ______________ if the worker believes that the value of the dollar is about to ____________ relative to the value of the euro.

A rise in foreign real national income tends to raise U.S.__________,shifting the U.S.AD curve to the __________.

A decrease in the price of a nonlabor input such as machinery

Which set of changes is definitely predicted to lower Real GDP in the short run?

Which of the following statements represents a correct and sequentially accurate economic explanation?

Changes in which of the following factors can shift the AD curve?

Which of the following best describes how the real balance effect works?

-Refer to Exhibit 8-3.A movement from point A to point B on AD1 would have been the result of

-Refer to Exhibit 8-3.A shift in aggregate demand from AD1 to AD2 could have been the result of

If businesses are optimistic about future sales,the short-run aggregate supply curve will shift leftward.

-Refer to Exhibit 8-3.A shift in aggregate demand from AD2 to AD1 could have been the result of

A change in the quantity demanded of Real GDP is graphically represented as a

The real balance effect describes the change in

A rise in the price level prompts an increase in the demand for credit.This is relevant to the __________ effect.

Aggregate demand refers to the

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS2 to SRAS1 could have been the result of

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS1 to SRAS2 could have been the result of

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Suppose that a worker has the option of being paid in euros or dollars.It would be to the workers advantage if his employer pays him in rather than if the worker believes that the value of the dollar is about to __ relative to the value of the euro.

A rise in foreign real national income tends to raise U.S.,shifting the U.S.AD curve to the .

-Refer to Exhibit 8-3.A movement from point A to point B on AD₁ would have been the result of

-Refer to Exhibit 8-3.A shift in aggregate demand from AD₁ to AD₂ could have been the result of

-Refer to Exhibit 8-3.A shift in aggregate demand from AD₂ to AD₁ could have been the result of

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS₂ to SRAS₁ could have been the result of

-Refer to Exhibit 8-4.A shift in short-run aggregate supply from SRAS₁ to SRAS₂ could have been the result of