Question 1

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Accepted Answer

A) unemployment and inflation are higher. 
B) unemployment and inflation are lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment is lower and inflation is higher. 
A) unemployment and inflation are higher. 
B) unemployment and inflation are lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment is lower and inflation is higher.

Question 2

Figure 35-2
Use the pair of diagrams below to answer the following questions.  
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in taxes moves the economy to

Accepted Answer

A) B and 2. 
B) D and 3. 
C) E and 2. 
D) None of the above is correct. 
A) B and 2. 
B) D and 3. 
C) E and 2. 
D) None of the above is correct.

Question 3

If a central bank decreases the money supply,then

Accepted Answer

A) prices,output,and unemployment rise. 
B) prices and output rise and unemployment falls. 
C) prices rise and output and unemployment fall. 
D) prices and output fall and unemployment rises. 
A) prices,output,and unemployment rise. 
B) prices and output rise and unemployment falls. 
C) prices rise and output and unemployment fall. 
D) prices and output fall and unemployment rises.

Question 4

When aggregate demand shifts right along the short-run aggregate supply curve,unemployment

Accepted Answer

A) falls,so there are upward pressures on wages and prices. 
B) falls,so there are downward pressures on wages and prices. 
C) rises,so there are upward pressures on wages and prices. 
D) rises,so there are downward pressures on wages and prices. 
A) falls,so there are upward pressures on wages and prices. 
B) falls,so there are downward pressures on wages and prices. 
C) rises,so there are upward pressures on wages and prices. 
D) rises,so there are downward pressures on wages and prices.

Question 5

If consumer confidence falls,then aggregate demand shifts

Accepted Answer

A) right,raising the inflation rate above its previous level. 
B) right,lowering the inflation rate below its previous level. 
C) left,raising the inflation rate above its previous level. 
D) left,lowering the inflation rate below its previous level. 
A) right,raising the inflation rate above its previous level. 
B) right,lowering the inflation rate below its previous level. 
C) left,raising the inflation rate above its previous level. 
D) left,lowering the inflation rate below its previous level.

Question 6

According to the Phillips curve,policymakers would reduce inflation but raise unemployment if they

Accepted Answer

A) decreased the money supply. 
B) increased government expenditures. 
C) decreased taxes. 
D) None of the above is correct. 
A) decreased the money supply. 
B) increased government expenditures. 
C) decreased taxes. 
D) None of the above is correct.

Question 7

Samuelson and Solow reasoned that when aggregate demand was high,unemployment was

Accepted Answer

A) low,so there was upward pressure on wages and prices. 
B) low,so there was downward pressure on wages and prices. 
C) high,so there was upward pressure on wages and prices. 
D) high,so there was downward pressure on wages and prices. 
A) low,so there was upward pressure on wages and prices. 
B) low,so there was downward pressure on wages and prices. 
C) high,so there was upward pressure on wages and prices. 
D) high,so there was downward pressure on wages and prices.

Question 8

As aggregate demand shifts left along the short-run aggregate supply curve,

Accepted Answer

A) inflation and unemployment are higher. 
B) inflation is higher and unemployment is lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment and inflation are lower. 
A) inflation and unemployment are higher. 
B) inflation is higher and unemployment is lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment and inflation are lower.

Question 9

Samuelson and Solow argued that when unemployment is high,

Accepted Answer

A) aggregate demand is high,which puts upward pressure on wages and prices. 
B) aggregate demand is high,which puts downward pressure on wages and prices. 
C) aggregate demand is low,which puts upward pressure on wages and prices. 
D) aggregate demand is low,which puts downward pressure on wages and prices. 
A) aggregate demand is high,which puts upward pressure on wages and prices. 
B) aggregate demand is high,which puts downward pressure on wages and prices. 
C) aggregate demand is low,which puts upward pressure on wages and prices. 
D) aggregate demand is low,which puts downward pressure on wages and prices.

Question 10

From 2008-2009 the Federal Reserve created a very large increase in the money supply.According to the short-run Phillips curve this policy should have

Accepted Answer

A) raised inflation and unemployment. 
B) raised inflation and reduced unemployment. 
C) reduced inflation and raised unemployment. 
D) reduced inflation and unemployment. 
A) raised inflation and unemployment. 
B) raised inflation and reduced unemployment. 
C) reduced inflation and raised unemployment. 
D) reduced inflation and unemployment.

Question 11

Suppose a middle-class tax cut increases consumption expenditures.Which of the following would you expect to occur as a result of this change?

Accepted Answer

A) The economy will move up and to the left along the short-run Phillips Curve. 
B) The economy will move down and to the right along the short-run Phillips Curve. 
C) ​The short-run Phillips Curve will shift to the left. 
D) ​The short-run Phillips Curve will shift to the right. 
A) The economy will move up and to the left along the short-run Phillips Curve. 
B) The economy will move down and to the right along the short-run Phillips Curve. 
C) ​The short-run Phillips Curve will shift to the left. 
D) ​The short-run Phillips Curve will shift to the right.

Question 12

The short-run Phillips curve shows the combinations of

Accepted Answer

A) unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve. 
B) unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. 
C) real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. 
D) None of the above is correct. 
A) unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-run aggregate supply curve. 
B) unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. 
C) real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along the aggregate demand curve. 
D) None of the above is correct.

Question 13

As the aggregate demand curve shifts rightward along a given aggregate supply curve,

Accepted Answer

A) unemployment and inflation are higher. 
B) unemployment and inflation are lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment is lower and inflation is higher. 
A) unemployment and inflation are higher. 
B) unemployment and inflation are lower. 
C) unemployment is higher and inflation is lower. 
D) unemployment is lower and inflation is higher.

Question 14

If the central bank increases the money supply,in the short run,the price level

Accepted Answer

A) and unemployment rise. 
B) rises and unemployment falls. 
C) falls and unemployment rises. 
D) and unemployment fall. 
A) and unemployment rise. 
B) rises and unemployment falls. 
C) falls and unemployment rises. 
D) and unemployment fall.

Question 15

If the central bank increases the money supply,then in the short run prices

Accepted Answer

A) rise and unemployment falls. 
B) fall and unemployment rises. 
C) and unemployment rise. 
D) and unemployment fall. 
A) rise and unemployment falls. 
B) fall and unemployment rises. 
C) and unemployment rise. 
D) and unemployment fall.

Question 16

If the short-run Phillips curve were stable,which of the following would be unusual?

Accepted Answer

A) an increase in government spending and a fall in unemployment 
B) an increase in inflation and a decrease in output 
C) a decrease in the inflation rate and a rise in the unemployment rate 
D) a decrease in the money supply and a rise in the unemployment rate. 
A) an increase in government spending and a fall in unemployment 
B) an increase in inflation and a decrease in output 
C) a decrease in the inflation rate and a rise in the unemployment rate 
D) a decrease in the money supply and a rise in the unemployment rate.

Question 17

When aggregate demand shifts left along the short-run aggregate supply curve,

Accepted Answer

A) unemployment and prices rise. 
B) unemployment rises and prices fall. 
C) unemployment falls and prices rise. 
D) unemployment and prices fall. 
A) unemployment and prices rise. 
B) unemployment rises and prices fall. 
C) unemployment falls and prices rise. 
D) unemployment and prices fall.

Question 18

When aggregate demand shifts rightward along the short-run aggregate-supply curve,inflation

Accepted Answer

A) increases and unemployment increases. 
B) increases and unemployment decreases. 
C) decreases and unemployment increases. 
D) decreases and unemployment decreases. 
A) increases and unemployment increases. 
B) increases and unemployment decreases. 
C) decreases and unemployment increases. 
D) decreases and unemployment decreases.

Question 19

The government of Blenova considers two policies.Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units.According to the short-run Phillips curve,policy A will lead

Accepted Answer

A) to a lower unemployment rate and a lower inflation rate than policy B. 
B) to a lower unemployment rate and a higher inflation rate than policy B. 
C) to a higher unemployment rate and lower inflation rate than policy B. 
D) to a higher unemployment rate and higher inflation rate than policy B. 
A) to a lower unemployment rate and a lower inflation rate than policy B. 
B) to a lower unemployment rate and a higher inflation rate than policy B. 
C) to a higher unemployment rate and lower inflation rate than policy B. 
D) to a higher unemployment rate and higher inflation rate than policy B.

Question 20

If consumption expenditures fall,then in the short run

Accepted Answer

A) inflation and unemployment rise. 
B) inflation rises and unemployment falls. 
C) inflation falls and unemployment rises. 
D) inflation and unemployment fall. 
A) inflation and unemployment rise. 
B) inflation rises and unemployment falls. 
C) inflation falls and unemployment rises. 
D) inflation and unemployment fall.

Exam 22: The Short Run Trade Off Between Inflation and Unemployment: The Phillips Curve

As the aggregate demand curve shifts leftward along a given aggregate supply curve,

Figure 35-2 Use the pair of diagrams below to answer the following questions. -Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,an increase in taxes moves the economy to

If a central bank decreases the money supply,then

When aggregate demand shifts right along the short-run aggregate supply curve,unemployment

If consumer confidence falls,then aggregate demand shifts

According to the Phillips curve,policymakers would reduce inflation but raise unemployment if they

Samuelson and Solow reasoned that when aggregate demand was high,unemployment was

As aggregate demand shifts left along the short-run aggregate supply curve,

Samuelson and Solow argued that when unemployment is high,

From 2008-2009 the Federal Reserve created a very large increase in the money supply.According to the short-run Phillips curve this policy should have

Suppose a middle-class tax cut increases consumption expenditures.Which of the following would you expect to occur as a result of this change?

The short-run Phillips curve shows the combinations of

As the aggregate demand curve shifts rightward along a given aggregate supply curve,

If the central bank increases the money supply,in the short run,the price level

If the central bank increases the money supply,then in the short run prices

If the short-run Phillips curve were stable,which of the following would be unusual?

When aggregate demand shifts left along the short-run aggregate supply curve,

When aggregate demand shifts rightward along the short-run aggregate-supply curve,inflation

The government of Blenova considers two policies.Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units.According to the short-run Phillips curve,policy A will lead

If consumption expenditures fall,then in the short run

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion