Question 1

In the late 1920s,the U.S.economy experienced a decrease in investment,which perhaps triggered the Great Depression.The decrease in investment

Accepted Answer

A) increased aggregate supply. 
B) decreased aggregate supply. 
C) increased aggregate demand. 
D) decreased aggregate demand. 
E) increased potential GDP. 
A) increased aggregate supply. 
B) decreased aggregate supply. 
C) increased aggregate demand. 
D) decreased aggregate demand. 
E) increased potential GDP.

Question 2

A combination of recession and inflation is called

Accepted Answer

A) an expansion. 
B) stagflation. 
C) a business cycle. 
D) a depression. 
E) a recession. 
A) an expansion. 
B) stagflation. 
C) a business cycle. 
D) a depression. 
E) a recession.

Question 3

The ________,the ________ is the quantity of real GDP supplied.

Accepted Answer

A) lower the price level;greater 
B) higher the price level;greater 
C) greater the demand for labor;smaller 
D) lower the supply of labor;greater 
E) lower aggregate demand;greater 
A) lower the price level;greater 
B) higher the price level;greater 
C) greater the demand for labor;smaller 
D) lower the supply of labor;greater 
E) lower aggregate demand;greater

Question 4

Which of the following statements is correct?

Accepted Answer

A) An increase in the price level shifts the aggregate demand curve rightward. 
B) An increase in the price level shifts the aggregate demand curve leftward. 
C) An increase in the quantity of the money shifts the aggregate demand curve rightward. 
D) An increase in the real interest rate shifts the aggregate demand curve rightward. 
E) An increase in the money wage rate shifts the aggregate demand curve leftward. 
A) An increase in the price level shifts the aggregate demand curve rightward. 
B) An increase in the price level shifts the aggregate demand curve leftward. 
C) An increase in the quantity of the money shifts the aggregate demand curve rightward. 
D) An increase in the real interest rate shifts the aggregate demand curve rightward. 
E) An increase in the money wage rate shifts the aggregate demand curve leftward.

Question 5

If potential GDP increases,then in the figure above the potential GDP line ________,and the aggregate supply curve ________.

Accepted Answer

A) shifts rightward;does not shift 
B) does not shift;shifts rightward 
C) shifts rightward;shifts rightward 
D) shifts rightward;shifts leftward 
E) does not shift;does not shift 
A) shifts rightward;does not shift 
B) does not shift;shifts rightward 
C) shifts rightward;shifts rightward 
D) shifts rightward;shifts leftward 
E) does not shift;does not shift

Question 6

An increase in the price level ________ the aggregate quantity supplied and ________ the aggregate quantity demanded.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;decreases 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;decreases

Question 7

Which of the following decreases aggregate demand and shifts the AD curve leftward?

Accepted Answer

A) a tax cut 
B) a decrease in price level 
C) a decrease in government expenditures 
D) a decrease in the price of exported goods and services 
E) a decrease in potential GDP 
A) a tax cut 
B) a decrease in price level 
C) a decrease in government expenditures 
D) a decrease in the price of exported goods and services 
E) a decrease in potential GDP

Question 8

The aggregate demand curve illustrates the relationship between

Accepted Answer

A) the price level and the quantity of goods demanded by households,firms,government,and foreigners. 
B) the real wage rate and the hours of labor demanded by firms. 
C) the price level and the potential quantity demanded of real GDP. 
D) the price level and the quantity of goods supplied by firms. 
E) the price level and the potential demand for real GDP. 
A) the price level and the quantity of goods demanded by households,firms,government,and foreigners. 
B) the real wage rate and the hours of labor demanded by firms. 
C) the price level and the potential quantity demanded of real GDP. 
D) the price level and the quantity of goods supplied by firms. 
E) the price level and the potential demand for real GDP.

Question 9

An increase in technology ________ potential GDP and ________ aggregate supply.

Accepted Answer

A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;does not change 
A) increases;increases 
B) increases;decreases 
C) decreases;increases 
D) decreases;decreases 
E) does not change;does not change

Question 10

Define "stagflation" and explain how it can be created.

Accepted Answer

Stagflation is a combination of two word

Question 11

A rise in the price level produces a ________ the aggregate supply curve.

Accepted Answer

A) rightward shift of 
B) movement downward along 
C) leftward shift of 
D) movement upward along 
E) rightward shift of the aggregate supply curve and a movement downward along 
A) rightward shift of 
B) movement downward along 
C) leftward shift of 
D) movement upward along 
E) rightward shift of the aggregate supply curve and a movement downward along

Question 12

A demand-pull inflation consists of ________ shifts in the AD curve and ________ shifts in the AS curve.

Accepted Answer

A) rightward;rightward 
B) rightward;leftward 
C) right;no 
D) leftward;rightward 
E) leftward;leftward 
A) rightward;rightward 
B) rightward;leftward 
C) right;no 
D) leftward;rightward 
E) leftward;leftward

Question 13

"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect.An increase i

Question 14

-The table above gives data for the nation of Pearl,a small island in the South Pacific.The economy is at full employment when real GDP is

Accepted Answer

A) $25 billion. 
B) $28 billion. 
C) $22 billion. 
D) $31 billion. 
E) $34 billion. 
A) $25 billion. 
B) $28 billion. 
C) $22 billion. 
D) $31 billion. 
E) $34 billion.

Question 15

What is the effect on the aggregate demand curve from an increase in the price level? In particular,does the aggregate demand curve shift leftward or rightward?

Accepted Answer

When the price level increases,there is

Question 16

When the price level rises,the quantity of real GDP supplied ________ because ________.

Accepted Answer

A) decreases;new businesses open 
B) increases;new businesses open 
C) decreases;businesses fail and have to shut their doors 
D) increases;AS curve shifts rightward 
E) increases;businesses fail and have to shut their doors 
A) decreases;new businesses open 
B) increases;new businesses open 
C) decreases;businesses fail and have to shut their doors 
D) increases;AS curve shifts rightward 
E) increases;businesses fail and have to shut their doors

Question 17

Cost-push inflation might initially result from

Accepted Answer

A) an increase in the quantity of money. 
B) a decrease in the quantity of money. 
C) the use of new technology. 
D) an increase in government expenditure. 
E) an increase in the cost of resources. 
A) an increase in the quantity of money. 
B) a decrease in the quantity of money. 
C) the use of new technology. 
D) an increase in government expenditure. 
E) an increase in the cost of resources.

Question 18

When potential GDP increases,the potential GDP line ________,and the aggregate supply curve ________.

Accepted Answer

A) shifts rightward;shifts rightward 
B) shifts rightward;shifts leftward 
C) shifts leftward;shifts rightward 
D) shifts leftward;shifts leftward 
E) shifts rightward;does not shift 
A) shifts rightward;shifts rightward 
B) shifts rightward;shifts leftward 
C) shifts leftward;shifts rightward 
D) shifts leftward;shifts leftward 
E) shifts rightward;does not shift

Question 19

A change in any component of aggregate demand creates a larger change in overall aggregate demand.This is the ________ effect,and it means,for example,that a(n)________ in consumption will cause an even larger ________ in AD.

Accepted Answer

A) multiplier;increase;increase 
B) liquidity;decrease;decrease 
C) growth;increase;decrease 
D) multiplier;decrease;decrease 
E) liquidity;increase;increase 
A) multiplier;increase;increase 
B) liquidity;decrease;decrease 
C) growth;increase;decrease 
D) multiplier;decrease;decrease 
E) liquidity;increase;increase

Question 20

Changes in which of the following shifts the aggregate supply curve?
I.the price level
Ii.the money wage rate
Iii.potential GDP

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i,ii,and iii 
A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i,ii,and iii

In the late 1920s,the U.S.economy experienced a decrease in investment,which perhaps triggered the Great Depression.The decrease in investment

A combination of recession and inflation is called

The ,the is the quantity of real GDP supplied.

Which of the following statements is correct?

If potential GDP increases,then in the figure above the potential GDP line ,and the aggregate supply curve .

An increase in the price level the aggregate quantity supplied and the aggregate quantity demanded.

Which of the following decreases aggregate demand and shifts the AD curve leftward?

The aggregate demand curve illustrates the relationship between

An increase in technology potential GDP and aggregate supply.

Define "stagflation" and explain how it can be created.

A rise in the price level produces a ________ the aggregate supply curve.

A demand-pull inflation consists of shifts in the AD curve and shifts in the AS curve.

"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect? Briefly explain your answer.

-The table above gives data for the nation of Pearl,a small island in the South Pacific.The economy is at full employment when real GDP is

What is the effect on the aggregate demand curve from an increase in the price level? In particular,does the aggregate demand curve shift leftward or rightward?

When the price level rises,the quantity of real GDP supplied because .

Cost-push inflation might initially result from

When potential GDP increases,the potential GDP line ,and the aggregate supply curve .

A change in any component of aggregate demand creates a larger change in overall aggregate demand.This is the effect,and it means,for example,that a(n) in consumption will cause an even larger in AD.

Changes in which of the following shifts the aggregate supply curve? I.the price level Ii.the money wage rate Iii.potential GDP

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Fiscal Policy and Monetary Policy

Filters

Exam 19: Aggregate Supply and Aggregate Demand

In the late 1920s,the U.S.economy experienced a decrease in investment,which perhaps triggered the Great Depression.The decrease in investment

A combination of recession and inflation is called

The ________,the ________ is the quantity of real GDP supplied.

Which of the following statements is correct?

If potential GDP increases,then in the figure above the potential GDP line ________,and the aggregate supply curve ________.

An increase in the price level ________ the aggregate quantity supplied and ________ the aggregate quantity demanded.

Which of the following decreases aggregate demand and shifts the AD curve leftward?

The aggregate demand curve illustrates the relationship between

An increase in technology ________ potential GDP and ________ aggregate supply.

Define "stagflation" and explain how it can be created.

A rise in the price level produces a ________ the aggregate supply curve.

A demand-pull inflation consists of ________ shifts in the AD curve and ________ shifts in the AS curve.

"An increase in Mexican income decreases aggregate demand in the United States." Is the preceding statement correct or incorrect? Briefly explain your answer.

-The table above gives data for the nation of Pearl,a small island in the South Pacific.The economy is at full employment when real GDP is

What is the effect on the aggregate demand curve from an increase in the price level? In particular,does the aggregate demand curve shift leftward or rightward?

When the price level rises,the quantity of real GDP supplied ________ because ________.

Cost-push inflation might initially result from

When potential GDP increases,the potential GDP line ________,and the aggregate supply curve ________.

A change in any component of aggregate demand creates a larger change in overall aggregate demand.This is the ________ effect,and it means,for example,that a(n)________ in consumption will cause an even larger ________ in AD.

Changes in which of the following shifts the aggregate supply curve? I.the price level Ii.the money wage rate Iii.potential GDP

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Fiscal Policy and Monetary Policy

Filters

The ,the is the quantity of real GDP supplied.

If potential GDP increases,then in the figure above the potential GDP line ,and the aggregate supply curve .

An increase in the price level the aggregate quantity supplied and the aggregate quantity demanded.

An increase in technology potential GDP and aggregate supply.

A demand-pull inflation consists of shifts in the AD curve and shifts in the AS curve.

When the price level rises,the quantity of real GDP supplied because .

When potential GDP increases,the potential GDP line ,and the aggregate supply curve .

A change in any component of aggregate demand creates a larger change in overall aggregate demand.This is the effect,and it means,for example,that a(n) in consumption will cause an even larger in AD.