Question 1

Velocity is the average number of times a dollar is spent to buy

Accepted Answer

A)  final goods and services in a year. 
B)  final and intermediate goods and services in a year. 
C)  final goods,but not services,in a year. 
D)  services in a year. 
A)  final goods and services in a year. 
B)  final and intermediate goods and services in a year. 
C)  final goods,but not services,in a year. 
D)  services in a year.

Question 2

A decrease in the price level

Accepted Answer

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

Question 3

Which of the following statements is false?

Accepted Answer

A)  Aggregate demand is a specific dollar amount,such as $400 billion. 
B)  At a given price level,anything that changes total expenditures changes aggregate demand. 
C)  Total expenditures rises if consumption rises,ceteris paribus. 
D)  Total expenditures rises if investment spending rises,ceteris paribus. 
A)  Aggregate demand is a specific dollar amount,such as $400 billion. 
B)  At a given price level,anything that changes total expenditures changes aggregate demand. 
C)  Total expenditures rises if consumption rises,ceteris paribus. 
D)  Total expenditures rises if investment spending rises,ceteris paribus.

Question 4

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

Accepted Answer

A)  Interest rates rise and wage rates fall. 
B)  Interest rates rise and there is a beneficial supply shock. 
C)  Interest rates rise and labor productivity increases. 
D)  Interest rates rise and individuals expect lower (future)incomes. 
E)  c and d 
A)  Interest rates rise and wage rates fall. 
B)  Interest rates rise and there is a beneficial supply shock. 
C)  Interest rates rise and labor productivity increases. 
D)  Interest rates rise and individuals expect lower (future)incomes. 
E)  c and d

Question 5

Which of the following statements is false?

Accepted Answer

A)  An increase in wage rates causes producers to move up along the SRAS curve. 
B)  An increase in the price level causes producers to move up along the SRAS curve. 
C)  The short-run aggregate supply (SRAS)curve is upward sloping. 
D)  The long-run aggregate supply (LRAS)curve is vertical. 
A)  An increase in wage rates causes producers to move up along the SRAS curve. 
B)  An increase in the price level causes producers to move up along the SRAS curve. 
C)  The short-run aggregate supply (SRAS)curve is upward sloping. 
D)  The long-run aggregate supply (LRAS)curve is vertical.

Question 6

Assume that the economy is currently in short-run equilibrium,then personal income taxes decline.Describe the correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be sure to state what the impact would be on the price level and Real GDP).

Accepted Answer

As personal income taxes decline,househo

Question 7

A short-run aggregate supply curve shows the

Accepted Answer

A)  amount of a particular good producers are willing and able to buy at a particular price,ceteris paribus. 
B)  real output (Real GDP)producers are willing and able to sell at different price levels,ceteris paribus. 
C)  real output (Real GDP)people are willing and able to buy and to sell at different price levels,ceteris paribus. 
D)  real output (Real GDP)people are willing and able to buy at different price levels,ceteris paribus. 
A)  amount of a particular good producers are willing and able to buy at a particular price,ceteris paribus. 
B)  real output (Real GDP)producers are willing and able to sell at different price levels,ceteris paribus. 
C)  real output (Real GDP)people are willing and able to buy and to sell at different price levels,ceteris paribus. 
D)  real output (Real GDP)people are willing and able to buy at different price levels,ceteris paribus.

Question 8

An increase in labor's productivity will cause the SRAS curve to shift __________ and the price level to __________.

Accepted Answer

A)  leftward; increase 
B)  rightward; decrease 
C)  rightward; increase 
D)  leftward; decrease 
A)  leftward; increase 
B)  rightward; decrease 
C)  rightward; increase 
D)  leftward; decrease

Question 9

A simultaneous rise in both aggregate demand and short-run aggregate supply will definitely

Accepted Answer

A)  raise the price level,but there is not enough information provided to know how Real GDP will change. 
B)  lower Real GDP,but there is not enough information provided to know how the price level will change. 
C)  raise the price level and Real GDP. 
D)  raise Real GDP,but there is not enough information provided to know how the price level will change. 
E)  raise the price level and lower Real GDP. 
A)  raise the price level,but there is not enough information provided to know how Real GDP will change. 
B)  lower Real GDP,but there is not enough information provided to know how the price level will change. 
C)  raise the price level and Real GDP. 
D)  raise Real GDP,but there is not enough information provided to know how the price level will change. 
E)  raise the price level and lower Real GDP.

Question 10

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

Accepted Answer

A)  Wage rates rise,SRAS rises,and the SRAS curve shifts to the left. 
B)  The prices of nonlabor inputs rise,SRAS decreases,and the SRAS curve shifts to the right. 
C)  Labor productivity rises,SRAS increases,and the SRAS curve shifts to the right. 
D)  An adverse supply shock hits,SRAS decreases,and the SRAS curve shifts to the right. 
E)  a and c 
A)  Wage rates rise,SRAS rises,and the SRAS curve shifts to the left. 
B)  The prices of nonlabor inputs rise,SRAS decreases,and the SRAS curve shifts to the right. 
C)  Labor productivity rises,SRAS increases,and the SRAS curve shifts to the right. 
D)  An adverse supply shock hits,SRAS decreases,and the SRAS curve shifts to the right. 
E)  a and c

Question 11

-Refer to Exhibit 8-4.Which of the following could not have caused a shift in aggregate supply from SRAS1 to SRAS2?

Accepted Answer

A)  an increase in productivity 
B)  a beneficial supply shock 
C)  a decrease in the price of a nonlabor input 
D)  a change in the price level 
E)  a decrease in wage rates 
A)  an increase in productivity 
B)  a beneficial supply shock 
C)  a decrease in the price of a nonlabor input 
D)  a change in the price level 
E)  a decrease in wage rates

Question 12

Assume that the economy is currently in short-run equilibrium,then the U.S.dollar appreciates in the foreign exchange market.Describe the correct sequence of events that happens as the economy adjusts to a new short-run equilibrium.

Accepted Answer

As the dollar appreciates,foreign goods

Question 13

A rise in wage rates

Accepted Answer

A)  causes the AD curve to shift leftward. 
B)  causes the short-run aggregate supply (SRAS)curve to shift rightward. 
C)  does not affect the present position of the SRAS curve. 
D)  causes the AD curve to shift rightward. 
E)  causes the SRAS curve to shift leftward. 
A)  causes the AD curve to shift leftward. 
B)  causes the short-run aggregate supply (SRAS)curve to shift rightward. 
C)  does not affect the present position of the SRAS curve. 
D)  causes the AD curve to shift rightward. 
E)  causes the SRAS curve to shift leftward.

Question 14

Explain how aggregate demand and aggregate supply may affect your job prospects after you leave college.Support your answer with an appropriate example.

Accepted Answer

The ability to find a job depe

Question 15

Starting from short-run equilibrium,the following occurs: labor productivity rises and individuals expect higher (future)incomes.What is the effect on the price level and Real GDP in the short run?

Accepted Answer

A)  Real GDP falls and the price level necessarily rises. 
B)  Real GDP rises and the effect on the price level cannot be determined. 
C)  Real GDP rises and the price level necessarily falls. 
D)  Real GDP falls and the effect on the price level cannot be determined. 
E)  Real GDP rises and the price level necessarily rises. 
A)  Real GDP falls and the price level necessarily rises. 
B)  Real GDP rises and the effect on the price level cannot be determined. 
C)  Real GDP rises and the price level necessarily falls. 
D)  Real GDP falls and the effect on the price level cannot be determined. 
E)  Real GDP rises and the price level necessarily rises.

Question 16

Starting from short-run equilibrium,the following occurs: personal income taxes rise and foreign real national income rises.What is the effect on the price level and Real GDP in the short run?

Accepted Answer

A)  The price level rises and Real GDP falls. 
B)  The price level falls and Real GDP falls. 
C)  The price level rises and Real GDP rises. 
D)  The price level falls and Real GDP rises. 
E)  There is not enough information to answer this question. 
A)  The price level rises and Real GDP falls. 
B)  The price level falls and Real GDP falls. 
C)  The price level rises and Real GDP rises. 
D)  The price level falls and Real GDP rises. 
E)  There is not enough information to answer this question.

Question 17

A decrease in consumption caused by a factor other than a change in the price level

Accepted Answer

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

Question 18

An aggregate demand (AD)curve shows the

Accepted Answer

A)  amount of a particular good people are willing and able to buy at a particular price,ceteris paribus. 
B)  real output (Real GDP)people are willing and able to sell at different price levels,ceteris paribus. 
C)  real output (Real (GDP)people are willing and able to buy and to sell at different price levels,ceteris paribus. 
D)  real output (Real GDP)people are willing and able to buy at different price levels,ceteris paribus. 
A)  amount of a particular good people are willing and able to buy at a particular price,ceteris paribus. 
B)  real output (Real GDP)people are willing and able to sell at different price levels,ceteris paribus. 
C)  real output (Real (GDP)people are willing and able to buy and to sell at different price levels,ceteris paribus. 
D)  real output (Real GDP)people are willing and able to buy at different price levels,ceteris paribus.

Question 19

-Refer to Exhibit 8-2.What word (rises or falls)should go in blank (5)and blank (6),respectively,to summarize the resulting impact on short run equilibrium of the given change in the economy?

Accepted Answer

A)  rises; rises 
B)  falls; falls 
C)  rises; falls 
D)  falls; rises 
A)  rises; rises 
B)  falls; falls 
C)  rises; falls 
D)  falls; rises

Question 20

An increase in labor productivity shifts the

Accepted Answer

A)  AD curve rightward. 
B)  AD curve leftward. 
C)  short-run aggregate supply (SRAS)curve leftward. 
D)  SRAS curve rightward. 
E)  none of the above 
A)  AD curve rightward. 
B)  AD curve leftward. 
C)  short-run aggregate supply (SRAS)curve leftward. 
D)  SRAS curve rightward. 
E)  none of the above

Exam 8: Production and Costs

Velocity is the average number of times a dollar is spent to buy

A decrease in the price level

Which of the following statements is false?

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

Which of the following statements is false?

Assume that the economy is currently in short-run equilibrium,then personal income taxes decline.Describe the correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be sure to state what the impact would be on the price level and Real GDP).

A short-run aggregate supply curve shows the

An increase in labor's productivity will cause the SRAS curve to shift __________ and the price level to __________.

A simultaneous rise in both aggregate demand and short-run aggregate supply will definitely

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

-Refer to Exhibit 8-4.Which of the following could not have caused a shift in aggregate supply from SRAS1 to SRAS2?

Assume that the economy is currently in short-run equilibrium,then the U.S.dollar appreciates in the foreign exchange market.Describe the correct sequence of events that happens as the economy adjusts to a new short-run equilibrium.

A rise in wage rates

Explain how aggregate demand and aggregate supply may affect your job prospects after you leave college.Support your answer with an appropriate example.

Starting from short-run equilibrium,the following occurs: labor productivity rises and individuals expect higher (future)incomes.What is the effect on the price level and Real GDP in the short run?

Starting from short-run equilibrium,the following occurs: personal income taxes rise and foreign real national income rises.What is the effect on the price level and Real GDP in the short run?

A decrease in consumption caused by a factor other than a change in the price level

An aggregate demand (AD)curve shows the

-Refer to Exhibit 8-2.What word (rises or falls)should go in blank (5)and blank (6),respectively,to summarize the resulting impact on short run equilibrium of the given change in the economy?

An increase in labor productivity shifts the

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

An increase in labor's productivity will cause the SRAS curve to shift and the price level to .

-Refer to Exhibit 8-4.Which of the following could not have caused a shift in aggregate supply from SRAS₁ to SRAS₂?