Question 1

A decrease in the price level will

Accepted Answer

A)  shift the aggregate demand curve to the left. 
B)  shift the aggregate demand curve to the right. 
C)  move the economy up along a stationary aggregate demand curve. 
D)  move the economy down along a stationary aggregate demand curve. 
A)  shift the aggregate demand curve to the left. 
B)  shift the aggregate demand curve to the right. 
C)  move the economy up along a stationary aggregate demand curve. 
D)  move the economy down along a stationary aggregate demand curve.

Question 2

The aggregate demand curve shows the relationship between the price level and the quantity of real GDP demanded by households and firms,excluding government spending.

Accepted Answer

A) True 
 B)False

Question 3

Suppose you are an advisor to the federal government.You are asked to look at macroeconomic data to evaluate whether the economy has entered an economic contraction this year.Which data do you look at? How does the economy behave at the onset of an economic contraction?

Accepted Answer

Since an economic contraction occurs whe

Question 4

Outline and explain the factors that shift the aggregate demand curve,and the short-run and long-run aggregate supply curves.

Accepted Answer

The aggregate demand curve can shift due

Question 5

The short-run aggregate supply curve shows the

Accepted Answer

A)  relationship between the unemployment rate and real GDP. 
B)  relationship between the price level and the quantity of real GDP supplied. 
C)  desired level of national expenditure at different price levels. 
D)  the relationship between labour supplied and the average wage rate. 
A)  relationship between the unemployment rate and real GDP. 
B)  relationship between the price level and the quantity of real GDP supplied. 
C)  desired level of national expenditure at different price levels. 
D)  the relationship between labour supplied and the average wage rate.

Question 6

Stagflation is often a result of

Accepted Answer

A)  a negative supply shock. 
B)  a decrease in aggregate demand. 
C)  an increase in aggregate demand. 
D)  an increase in aggregate supply. 
A)  a negative supply shock. 
B)  a decrease in aggregate demand. 
C)  an increase in aggregate demand. 
D)  an increase in aggregate supply.

Question 7

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

Accepted Answer

A)  The world oil shock of 1974. 
B)  The policy of high interest rates in the late 1980s. 
C)  The introduction of the Goods and Services Tax (GST) in 2000. 
D)  The introduction of unemployment benefit payments in 1944. 
A)  The world oil shock of 1974. 
B)  The policy of high interest rates in the late 1980s. 
C)  The introduction of the Goods and Services Tax (GST) in 2000. 
D)  The introduction of unemployment benefit payments in 1944.

Question 8

The rate of inflation does not necessarily increase during the expansion phase of the business cycle.

Accepted Answer

A) True 
 B)False

Question 9

If the economy receives an influx of new workers from immigration,the

Accepted Answer

A)  long-run aggregate supply curve will shift to the right. 
B)  long-run aggregate supply curve will shift to the left. 
C)  economy will move up along the long-run aggregate supply curve. 
D)  economy will move down along the long-run aggregate supply curve. 
A)  long-run aggregate supply curve will shift to the right. 
B)  long-run aggregate supply curve will shift to the left. 
C)  economy will move up along the long-run aggregate supply curve. 
D)  economy will move down along the long-run aggregate supply curve.

Question 10

Which of the following is one of the explanations as to why the aggregate demand curve slopes downward?

Accepted Answer

A)  Increases in the price level lower the interest rate and decrease consumption spending. 
B)  Increases in the price level lower the interest rate and decrease investment spending. 
C)  Increases in Australia's price level relative to the price level in other countries lowers net exports. 
D)  Increases in the price level raise real wealth and lowers consumption spending. 
A)  Increases in the price level lower the interest rate and decrease consumption spending. 
B)  Increases in the price level lower the interest rate and decrease investment spending. 
C)  Increases in Australia's price level relative to the price level in other countries lowers net exports. 
D)  Increases in the price level raise real wealth and lowers consumption spending.

Question 11

Starting from long-run equilibrium,use the basic (static)aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth.

Accepted Answer

In the following graph,before the declin

Question 12

Which of the following goods would usually see the largest decline in demand during a recession?

Accepted Answer

A)  Cars 
B)  Food 
C)  Clothing 
D)  Hair cuts 
A)  Cars 
B)  Food 
C)  Clothing 
D)  Hair cuts

Question 13

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between

Accepted Answer

A)  1928 and 1931. 
B)  the late 1950s and the late 1980s. 
C)  the late 1940s and the early 1970s. 
D)  1991 and 2007. 
A)  1928 and 1931. 
B)  the late 1950s and the late 1980s. 
C)  the late 1940s and the early 1970s. 
D)  1991 and 2007.

Question 14

The long-run aggregate supply curve shows the maximum output possible for an economy and,therefore,does not shift.

Accepted Answer

A) True 
 B)False

Question 15

________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP.

Accepted Answer

A)  Autonomous; induced 
B)  Induced; autonomous 
C)  Voluntary; autonomous 
D)  Autonomous; voluntary 
A)  Autonomous; induced 
B)  Induced; autonomous 
C)  Voluntary; autonomous 
D)  Autonomous; voluntary

Question 16

Short-run macroeconomic equilibrium occurs when

Accepted Answer

A)  aggregate demand and short-run aggregate supply intersect. 
B)  the equilibrium lies on the long-run supply curve. 
C)  the price level is constant in the short run. 
D)  the two criteria-that aggregate demand and short-run aggregate supply intersect, and that the equilibrium lies on the long-run supply curve-are satisfied. 
A)  aggregate demand and short-run aggregate supply intersect. 
B)  the equilibrium lies on the long-run supply curve. 
C)  the price level is constant in the short run. 
D)  the two criteria-that aggregate demand and short-run aggregate supply intersect, and that the equilibrium lies on the long-run supply curve-are satisfied.

Question 17

Figure 14.4  
-Suppose that in Figure 14.4,the level of GDP associated with point N is potential GDP.If the Australian economy is currently at point K

Accepted Answer

A)  firms are operating above capacity. 
B)  the economy is at full employment. 
C)  the economy is in equilibrium below full employment. 
D)  the level of unemployment is equal to the natural rate. 
A)  firms are operating above capacity. 
B)  the economy is at full employment. 
C)  the economy is in equilibrium below full employment. 
D)  the level of unemployment is equal to the natural rate.

Question 18

The long-run aggregate supply curve shows the relationship between the ________ and ________.

Accepted Answer

A)  inflation rate; quantity of real GDP demanded 
B)  real interest rate; quantity of real GDP supplied 
C)  nominal interest rate; quantity of real GDP supplied 
D)  price level; quantity of real GDP supplied 
A)  inflation rate; quantity of real GDP demanded 
B)  real interest rate; quantity of real GDP supplied 
C)  nominal interest rate; quantity of real GDP supplied 
D)  price level; quantity of real GDP supplied

Question 19

Which of the following will shift the aggregate demand curve to the left,ceteris paribus?

Accepted Answer

A)  An increase in interest rates. 
B)  An increase in disposable income. 
C)  An increase in expected profits for firms. 
D)  An increase in net exports. 
A)  An increase in interest rates. 
B)  An increase in disposable income. 
C)  An increase in expected profits for firms. 
D)  An increase in net exports.

Question 20

What variables will shift the short-run aggregate supply curve?

Accepted Answer

Expected changes in the future price lev

A decrease in the price level will

The aggregate demand curve shows the relationship between the price level and the quantity of real GDP demanded by households and firms,excluding government spending.

Suppose you are an advisor to the federal government.You are asked to look at macroeconomic data to evaluate whether the economy has entered an economic contraction this year.Which data do you look at? How does the economy behave at the onset of an economic contraction?

Outline and explain the factors that shift the aggregate demand curve,and the short-run and long-run aggregate supply curves.

The short-run aggregate supply curve shows the

Stagflation is often a result of

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

The rate of inflation does not necessarily increase during the expansion phase of the business cycle.

If the economy receives an influx of new workers from immigration,the

Which of the following is one of the explanations as to why the aggregate demand curve slopes downward?

Starting from long-run equilibrium,use the basic (static)aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth.

Which of the following goods would usually see the largest decline in demand during a recession?

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between

The long-run aggregate supply curve shows the maximum output possible for an economy and,therefore,does not shift.

consumption is consumption that depends upon the level of GDP and consumption is consumption that does not depend upon the level of GDP.

Short-run macroeconomic equilibrium occurs when

Figure 14.4 -Suppose that in Figure 14.4,the level of GDP associated with point N is potential GDP.If the Australian economy is currently at point K

The long-run aggregate supply curve shows the relationship between the and .

Which of the following will shift the aggregate demand curve to the left,ceteris paribus?

What variables will shift the short-run aggregate supply curve?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 14: Economic Growth, the Financial System and Business Cycles

A decrease in the price level will

The aggregate demand curve shows the relationship between the price level and the quantity of real GDP demanded by households and firms,excluding government spending.

Suppose you are an advisor to the federal government.You are asked to look at macroeconomic data to evaluate whether the economy has entered an economic contraction this year.Which data do you look at? How does the economy behave at the onset of an economic contraction?

Outline and explain the factors that shift the aggregate demand curve,and the short-run and long-run aggregate supply curves.

The short-run aggregate supply curve shows the

Stagflation is often a result of

Which of the following experiences in the Australian economy led to an increase in the unemployment rate and the inflation rate?

The rate of inflation does not necessarily increase during the expansion phase of the business cycle.

If the economy receives an influx of new workers from immigration,the

Which of the following is one of the explanations as to why the aggregate demand curve slopes downward?

Starting from long-run equilibrium,use the basic (static)aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth.

Which of the following goods would usually see the largest decline in demand during a recession?

The 'long boom' in Australia referred to the general period of strong economic growth that occurred between

The long-run aggregate supply curve shows the maximum output possible for an economy and,therefore,does not shift.

________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP.

Short-run macroeconomic equilibrium occurs when

Figure 14.4 -Suppose that in Figure 14.4,the level of GDP associated with point N is potential GDP.If the Australian economy is currently at point K

The long-run aggregate supply curve shows the relationship between the ________ and ________.

Which of the following will shift the aggregate demand curve to the left,ceteris paribus?

What variables will shift the short-run aggregate supply curve?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

consumption is consumption that depends upon the level of GDP and consumption is consumption that does not depend upon the level of GDP.

The long-run aggregate supply curve shows the relationship between the and .