Question 1

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

Accepted Answer

If the demand for consumption goods decr

Question 2

What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time?

Accepted Answer

A) ​AD would increase, because only federal government purchases affect AD. 
B) ​AD would decrease, because only state and local government purchases affect AD. 
C) ​AD would increase if the change in federal purchases were smaller than the change in state and local purchases. 
D) ​AD would decrease if the change in federal purchases was smaller than the change in state and local purchases. 
A) ​AD would increase, because only federal government purchases affect AD. 
B) ​AD would decrease, because only state and local government purchases affect AD. 
C) ​AD would increase if the change in federal purchases were smaller than the change in state and local purchases. 
D) ​AD would decrease if the change in federal purchases was smaller than the change in state and local purchases.

Question 3

The short-run aggregate supply curve shows the relationship between ____ and ____, holding all other factors constant.

Accepted Answer

A) ​a price level, the quantity of real GDP supplied 
B) ​price level, the supply of real GDP 
C) ​nominal GDP, the price level of real GDP 
D) ​the quantity of nominal GDP supplied, the price level 
A) ​a price level, the quantity of real GDP supplied 
B) ​price level, the supply of real GDP 
C) ​nominal GDP, the price level of real GDP 
D) ​the quantity of nominal GDP supplied, the price level

Question 4

If the price of oil increased by 15 percent when oil producers believed that other prices were rising 10 percent over the same period, what would happen to the quantity of real output supplied by the oil industry?

Accepted Answer

Oil producers would be subject to the mi

Question 5

When there is an inflationary gap:

Accepted Answer

A) ​Employment exceeds full employment. 
B) ​Employment equals full employment. 
C) ​Employment is less than full employment. 
D) ​Any of the above is possible. 
A) ​Employment exceeds full employment. 
B) ​Employment equals full employment. 
C) ​Employment is less than full employment. 
D) ​Any of the above is possible.

Question 6

If the profit effect and misperception effect existed in both the short run and the long run, then SRAS is ____ and LRAS is ____.

Accepted Answer

A) ​upward sloping; upward sloping 
B) ​upward sloping: vertical 
C) ​vertical; upward sloping 
D) ​vertical; vertical 
A) ​upward sloping; upward sloping 
B) ​upward sloping: vertical 
C) ​vertical; upward sloping 
D) ​vertical; vertical

Question 7

When the price level falls, households and firms reduce their holdings of money, leading to a lower interest rate and an increase in borrowing and an increase in RGDP demanded.

Accepted Answer

A) True 
 B)False

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time?

The short-run aggregate supply curve shows the relationship between and , holding all other factors constant.

If the price of oil increased by 15 percent when oil producers believed that other prices were rising 10 percent over the same period, what would happen to the quantity of real output supplied by the oil industry?

When there is an inflationary gap:

If the profit effect and misperception effect existed in both the short run and the long run, then SRAS is and LRAS is .

When the price level falls, households and firms reduce their holdings of money, leading to a lower interest rate and an increase in borrowing and an increase in RGDP demanded.

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exam 14: Monopolistic Competition and Product Differentiation

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time?

The short-run aggregate supply curve shows the relationship between ____ and ____, holding all other factors constant.

If the price of oil increased by 15 percent when oil producers believed that other prices were rising 10 percent over the same period, what would happen to the quantity of real output supplied by the oil industry?

When there is an inflationary gap:

If the profit effect and misperception effect existed in both the short run and the long run, then SRAS is ____ and LRAS is ____.

When the price level falls, households and firms reduce their holdings of money, leading to a lower interest rate and an increase in borrowing and an increase in RGDP demanded.

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

The short-run aggregate supply curve shows the relationship between and , holding all other factors constant.

If the profit effect and misperception effect existed in both the short run and the long run, then SRAS is and LRAS is .