Question 1

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 2

Minimum wage laws tend to make the price level more flexible rather than less flexible.

Accepted Answer

A) True 
 B)False

Question 3

When national income in other nations decreases, aggregate demand in our economy:

Accepted Answer

A)  Increases because our exports will increase 
B)  Decreases because our exports will decrease 
C)  Increases because our imports will decrease 
D)  Decreases because our imports will increase 
A)  Increases because our exports will increase 
B)  Decreases because our exports will decrease 
C)  Increases because our imports will decrease 
D)  Decreases because our imports will increase

Question 4

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Accepted Answer

A) True 
 B)False

Question 5

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Accepted Answer

A)  Move the economy to point A 
B)  Move the economy to point B 
C)  Move the economy to point D 
D)  Shift the AD curve to the left 
A)  Move the economy to point A 
B)  Move the economy to point B 
C)  Move the economy to point D 
D)  Shift the AD curve to the left

Question 6

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:

Accepted Answer

A)  Cost-push inflation, and the new equilibrium output will be less than Q2 
B)  Demand-pull inflation, and the new equilibrium output will be less than Q2 
C)  Demand-pull inflation, and the new equilibrium output will be more than Q2 
D)  Cost-push inflation, and the new equilibrium output will be more than Q2 
A)  Cost-push inflation, and the new equilibrium output will be less than Q2 
B)  Demand-pull inflation, and the new equilibrium output will be less than Q2 
C)  Demand-pull inflation, and the new equilibrium output will be more than Q2 
D)  Cost-push inflation, and the new equilibrium output will be more than Q2

Question 7

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

Accepted Answer

A)  The interest-rate effect 
B)  The real-balances effect 
C)  A change in the degree of excess capacity 
D)  A change in real value of consumer wealth 
A)  The interest-rate effect 
B)  The real-balances effect 
C)  A change in the degree of excess capacity 
D)  A change in real value of consumer wealth

Question 8

If the cost of resources decreases, then real domestic output will increase.

Accepted Answer

A) True 
 B)False

Question 9

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

Accepted Answer

A)  Cost-push inflation and rising output 
B)  Demand-pull inflation and rising output 
C)  Cost-push inflation and falling output 
D)  Demand-pull inflation and falling output 
A)  Cost-push inflation and rising output 
B)  Demand-pull inflation and rising output 
C)  Cost-push inflation and falling output 
D)  Demand-pull inflation and falling output

Question 10

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy.   Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Accepted Answer

A)  150 and $2500 
B)  250 and $2500 
C)  200 and $2000 
D)  300 and $3000 
A)  150 and $2500 
B)  250 and $2500 
C)  200 and $2000 
D)  300 and $3000

Question 11

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply.   Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Accepted Answer

A)  1 and 2 
B)  2 and 10 
C)  3 and 6 
D)  7 and 8 
A)  1 and 2 
B)  2 and 10 
C)  3 and 6 
D)  7 and 8

Question 12

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Accepted Answer

A)  Increase from $40 to $90 and aggregate supply would decrease 
B)  Increase from $50 to $60 and aggregate supply would decrease 
C)  Increase from $60 to $70 and aggregate supply would increase 
D)  Remain unchanged but aggregate supply would increase 
A)  Increase from $40 to $90 and aggregate supply would decrease 
B)  Increase from $50 to $60 and aggregate supply would decrease 
C)  Increase from $60 to $70 and aggregate supply would increase 
D)  Remain unchanged but aggregate supply would increase

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Minimum wage laws tend to make the price level more flexible rather than less flexible.

When national income in other nations decreases, aggregate demand in our economy:

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD₂, then a further increase in consumption and investment spending will cause:

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

If the cost of resources decreases, then real domestic output will increase.

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply. Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Exam 12: Aggregate Demand and Aggregate Supply

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Minimum wage laws tend to make the price level more flexible rather than less flexible.

When national income in other nations decreases, aggregate demand in our economy:

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

If the cost of resources decreases, then real domestic output will increase.

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply. Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD₂, then a further increase in consumption and investment spending will cause: