Question 1

Other things the same,as the price level rises,the real value of money

Accepted Answer

A) and the exchange rate rise. 
B) and the exchange rate fall. 
C) rises and the exchange rate falls. 
D) falls and the exchange rate rises. 
A) and the exchange rate rise. 
B) and the exchange rate fall. 
C) rises and the exchange rate falls. 
D) falls and the exchange rate rises. D

Question 2

Other things the same,an increase in the price level makes consumers feel

Accepted Answer

A) less wealthy,so the quantity of goods and services demanded falls. 
B) less wealthy,so the quantity of goods and services demanded rises. 
C) more wealthy,so the quantity of goods and services demanded rises. 
D) more wealthy,so the quantity of goods and services demanded falls. 
A) less wealthy,so the quantity of goods and services demanded falls. 
B) less wealthy,so the quantity of goods and services demanded rises. 
C) more wealthy,so the quantity of goods and services demanded rises. 
D) more wealthy,so the quantity of goods and services demanded falls. A

Question 3

The initial impact of the repeal of an investment tax credit is to shift

Accepted Answer

A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left. 
A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left. B

Question 4

If the price level falls,the real value of a dollar

Accepted Answer

A) rises,so people will want to buy more.This response helps explain the slope of the aggregate demand curve. 
B) rises,so people will want to buy more.This response shifts aggregate demand to the right. 
C) falls,so people will want to buy less.This response helps explain the slope of the aggregate demand curve. 
D) falls,so people will want to buy less.This response shifts aggregate demand to the left. 
A) rises,so people will want to buy more.This response helps explain the slope of the aggregate demand curve. 
B) rises,so people will want to buy more.This response shifts aggregate demand to the right. 
C) falls,so people will want to buy less.This response helps explain the slope of the aggregate demand curve. 
D) falls,so people will want to buy less.This response shifts aggregate demand to the left.

Question 5

From 2006 to 2008 there was a dramatic fall in the price of houses.If this fall made people feel less wealthy,then it would have shifted

Accepted Answer

A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left. 
A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left.

Question 6

Other things the same,an increase in the price level causes the interest rate to

Accepted Answer

A) increase,the dollar to depreciate,and net exports to increase. 
B) increase,the dollar to appreciate,and net exports to decrease. 
C) decrease,the dollar to depreciate,and net exports to increase. 
D) decrease,the dollar to appreciate,and net exports to decrease. 
A) increase,the dollar to depreciate,and net exports to increase. 
B) increase,the dollar to appreciate,and net exports to decrease. 
C) decrease,the dollar to depreciate,and net exports to increase. 
D) decrease,the dollar to appreciate,and net exports to decrease.

Question 7

Other things the same,an increase in the amount of capital firms wish to purchase would initially shift

Accepted Answer

A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left. 
A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left.

Question 8

If the price level falls,the real value of a dollar

Accepted Answer

A) rises,so people will want to buy more. 
B) rises,so people will want to buy less. 
C) falls,so people will want to buy more. 
D) falls,so people will want to buy less. 
A) rises,so people will want to buy more. 
B) rises,so people will want to buy less. 
C) falls,so people will want to buy more. 
D) falls,so people will want to buy less.

Question 9

If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,

Accepted Answer

A) the dollar would appreciate which would cause aggregate demand to shift right. 
B) the dollar would appreciate which would cause aggregate demand to shift left. 
C) the dollar would depreciate which would cause aggregate demand to shift right. 
D) the dollar would depreciate which would cause aggregate demand to shift left. 
A) the dollar would appreciate which would cause aggregate demand to shift right. 
B) the dollar would appreciate which would cause aggregate demand to shift left. 
C) the dollar would depreciate which would cause aggregate demand to shift right. 
D) the dollar would depreciate which would cause aggregate demand to shift left.

Question 10

At a given price level,an increase in which of the following shifts aggregate demand to the right?

Accepted Answer

A) consumption 
B) investment 
C) government expenditures 
D) All of the above are correct. 
A) consumption 
B) investment 
C) government expenditures 
D) All of the above are correct.

Question 11

People will buy more if the price level

Accepted Answer

A) rises because rising prices increase the real value of a dollar. 
B) rises because rising prices decrease the real value of a dollar. 
C) falls because falling prices increase the real value of a dollar. 
D) falls because falling prices decrease the real value of a dollar. 
A) rises because rising prices increase the real value of a dollar. 
B) rises because rising prices decrease the real value of a dollar. 
C) falls because falling prices increase the real value of a dollar. 
D) falls because falling prices decrease the real value of a dollar.

Question 12

The aggregate demand curve shifts left if either

Accepted Answer

A) speculators gain confidence in U.S.assets or foreign countries enter into recession. 
B) speculators gain confidence in U.S.assets or recessions in foreign countries end. 
C) speculators lose confidence in U.S.assets or foreign countries enter into recession. 
D) speculators lose confidence in U.S.assets or recessions in foreign countries end. 
A) speculators gain confidence in U.S.assets or foreign countries enter into recession. 
B) speculators gain confidence in U.S.assets or recessions in foreign countries end. 
C) speculators lose confidence in U.S.assets or foreign countries enter into recession. 
D) speculators lose confidence in U.S.assets or recessions in foreign countries end.

Question 13

If businesses in general decide that they have overbuilt and so now have too much capital,their response to this would initially shift

Accepted Answer

A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left. 
A) aggregate demand right. 
B) aggregate demand left. 
C) aggregate supply right. 
D) aggregate supply left.

Question 14

The aggregate demand and aggregate supply graph has the

Accepted Answer

A) quantity of output on the horizontal axis.Output is best measured by real GDP. 
B) quantity of output on the horizontal axis.Output is best measured by nominal GDP. 
C) quantity of output on the vertical axis.Output is best measured by real GDP. 
D) quantity of output on the vertical axis.Output is best measured by nominal GDP. 
A) quantity of output on the horizontal axis.Output is best measured by real GDP. 
B) quantity of output on the horizontal axis.Output is best measured by nominal GDP. 
C) quantity of output on the vertical axis.Output is best measured by real GDP. 
D) quantity of output on the vertical axis.Output is best measured by nominal GDP.

Question 15

Other things the same,as the price level decreases it induces greater spending on

Accepted Answer

A) both net exports and investment. 
B) net exports but not investment. 
C) investment but not net exports. 
D) neither net exports nor investment. 
A) both net exports and investment. 
B) net exports but not investment. 
C) investment but not net exports. 
D) neither net exports nor investment.

Question 16

Aggregate demand shifts right when the government

Accepted Answer

A) decreases taxes. 
B) cuts military expenditures. 
C) repeals an investment tax credit. 
D) None of the above is correct. 
A) decreases taxes. 
B) cuts military expenditures. 
C) repeals an investment tax credit. 
D) None of the above is correct.

Question 17

A decrease in U.S.interest rates leads to

Accepted Answer

A) a depreciation of the dollar that leads to greater net exports. 
B) a depreciation of the dollar that leads to smaller net exports. 
C) an appreciation of the dollar that leads to greater net exports. 
D) an appreciation of the dollar that leads to smaller net exports. 
A) a depreciation of the dollar that leads to greater net exports. 
B) a depreciation of the dollar that leads to smaller net exports. 
C) an appreciation of the dollar that leads to greater net exports. 
D) an appreciation of the dollar that leads to smaller net exports.

Question 18

Which of the following both shift aggregate demand left?

Accepted Answer

A) a decrease in taxes and at a given price level consumers feel more wealthy 
B) a decrease in taxes and at a given price level consumers feel less wealthy 
C) an increase in taxes and at a given price level consumers feel more wealthy 
D) an increase in taxes and at a given price level consumers feel less wealthy 
A) a decrease in taxes and at a given price level consumers feel more wealthy 
B) a decrease in taxes and at a given price level consumers feel less wealthy 
C) an increase in taxes and at a given price level consumers feel more wealthy 
D) an increase in taxes and at a given price level consumers feel less wealthy

Question 19

Which of the following shifts aggregate demand right?

Accepted Answer

A) both a decrease in the price level and the implementation of an investment tax credit 
B) a decrease in the price level but not the implementation of an investment tax credit 
C) the implementation of an investment tax credit but not a decrease in the price level 
D) neither a decrease in the price level nor the implementation of an investment tax credit 
A) both a decrease in the price level and the implementation of an investment tax credit 
B) a decrease in the price level but not the implementation of an investment tax credit 
C) the implementation of an investment tax credit but not a decrease in the price level 
D) neither a decrease in the price level nor the implementation of an investment tax credit

Question 20

Other things the same,if the price level rises,people

Accepted Answer

A) increase foreign bond purchases,so the dollar appreciates. 
B) increase foreign bond purchases,so the dollar depreciates. 
C) increase domestic bond purchases,so the dollar appreciates. 
D) increase domestic bond purchases,so the dollar depreciates. 
A) increase foreign bond purchases,so the dollar appreciates. 
B) increase foreign bond purchases,so the dollar depreciates. 
C) increase domestic bond purchases,so the dollar appreciates. 
D) increase domestic bond purchases,so the dollar depreciates.

Exam 20: Aggregate Demand and Aggregate Supply: The Aggregate-Demand Curve

Other things the same,as the price level rises,the real value of money

Other things the same,an increase in the price level makes consumers feel

The initial impact of the repeal of an investment tax credit is to shift

If the price level falls,the real value of a dollar

From 2006 to 2008 there was a dramatic fall in the price of houses.If this fall made people feel less wealthy,then it would have shifted

Other things the same,an increase in the price level causes the interest rate to

Other things the same,an increase in the amount of capital firms wish to purchase would initially shift

If the price level falls,the real value of a dollar

If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,

At a given price level,an increase in which of the following shifts aggregate demand to the right?

People will buy more if the price level

The aggregate demand curve shifts left if either

If businesses in general decide that they have overbuilt and so now have too much capital,their response to this would initially shift

The aggregate demand and aggregate supply graph has the

Other things the same,as the price level decreases it induces greater spending on

Aggregate demand shifts right when the government

A decrease in U.S.interest rates leads to

Which of the following both shift aggregate demand left?

Which of the following shifts aggregate demand right?

Other things the same,if the price level rises,people

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