Question 1

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

Accepted Answer

A) new Keynesianism;the new classical model 
B) the real business cycle model;Marxism 
C) rational expectations;monetarism 
D) the monetarist model;the Keynesian model 
A) new Keynesianism;the new classical model 
B) the real business cycle model;Marxism 
C) rational expectations;monetarism 
D) the monetarist model;the Keynesian model

Question 2

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Accepted Answer

A) Decreases in the price level raise the interest rate and increase consumption spending. 
B) Decreases in the price level raise the interest rate and increase investment spending. 
C) Decreases in the U.S.price level relative to the price level in other countries lower net exports. 
D) Decreases in the price level raise real wealth and increase consumption spending. 
A) Decreases in the price level raise the interest rate and increase consumption spending. 
B) Decreases in the price level raise the interest rate and increase investment spending. 
C) Decreases in the U.S.price level relative to the price level in other countries lower net exports. 
D) Decreases in the price level raise real wealth and increase consumption spending.

Question 3

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

Accepted Answer

A) the financial crisis that began in 2007 
B) the rapid inflation of the early 2000s 
C) increases in the price of lumber 
D) rising wages in the construction industry 
A) the financial crisis that began in 2007 
B) the rapid inflation of the early 2000s 
C) increases in the price of lumber 
D) rising wages in the construction industry

Question 4

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,a decrease in personal income taxes would be represented by a movement from

Accepted Answer

A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A. 
A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A.

Question 5

The invention of the integrated circuit by Jack Kilby of Texas Instruments gave rise to the information age.What did this technological change do the short-run supply curve?

Accepted Answer

A) It shifted the short-run aggregate supply curve to the left. 
B) It shifted the short-run aggregate supply curve to the right. 
C) It moved the economy up along a stationary short-run aggregate supply curve. 
D) It moved the economy down along a stationary short-run aggregate supply curve. 
A) It shifted the short-run aggregate supply curve to the left. 
B) It shifted the short-run aggregate supply curve to the right. 
C) It moved the economy up along a stationary short-run aggregate supply curve. 
D) It moved the economy down along a stationary short-run aggregate supply curve.

Question 6

Using an aggregate demand graph,illustrate the impact of an increase in the growth rate of U.S.GDP relative to the growth rate of foreign GDP.

Accepted Answer

@#IMG-DLM& The increase in the growth rate of U.S.

Question 7

Figure 13-4  
-Refer to Figure 13-4.In the figure above,AD1,LRAS1 and SRAS1 denote AD,LRAS and SRAS in year 1,while AD2,LRAS2 and SRAS2 denote AD,LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

Accepted Answer

A) 2.5% 
B) 7.3% 
C) 8.0% 
D) 10.0% 
A) 2.5% 
B) 7.3% 
C) 8.0% 
D) 10.0%

Question 8

An increase in government spending will result in an increase in the price level and an increase in real GDP in the long run.

Accepted Answer

A) True 
 B)False

Question 9

The recession of 2007-2009 made many consumers pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Accepted Answer

A) This will move the economy up along a stationary aggregate demand curve. 
B) This will move the economy down along a stationary aggregate demand curve. 
C) This will shift the aggregate demand curve to the left. 
D) This will shift the aggregate demand curve to the right. 
A) This will move the economy up along a stationary aggregate demand curve. 
B) This will move the economy down along a stationary aggregate demand curve. 
C) This will shift the aggregate demand curve to the left. 
D) This will shift the aggregate demand curve to the right.

Question 10

Figure 13-2  
-Refer to Figure 13-2.Ceteris paribus,a decrease in the price level would be represented by a movement from

Accepted Answer

A) SRAS1 to SRAS2. 
B) SRAS2 to SRAS1. 
C) point A to point B. 
D) point B to point A. 
A) SRAS1 to SRAS2. 
B) SRAS2 to SRAS1. 
C) point A to point B. 
D) point B to point A.

Question 11

An increase in the price level shifts the aggregate demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 12

If the economy receives an influx of new workers from immigration,

Accepted Answer

A) the long-run aggregate supply curve will shift to the right. 
B) the long-run aggregate supply curve will shift to the left. 
C) we will move up along the long-run aggregate supply curve. 
D) we will move down along the long-run aggregate supply curve. 
A) the long-run aggregate supply curve will shift to the right. 
B) the long-run aggregate supply curve will shift to the left. 
C) we will move up along the long-run aggregate supply curve. 
D) we will move down along the long-run aggregate supply curve.

Question 13

Which of the following will shift the aggregate demand curve to the right,ceteris paribus?

Accepted Answer

A) an increase in interest rates 
B) a decrease in disposable income 
C) a decrease in expected profits for firms 
D) an increase in net exports 
A) an increase in interest rates 
B) a decrease in disposable income 
C) a decrease in expected profits for firms 
D) an increase in net exports

Question 14

When people became ________ concerned with the underlying value of their houses and became ________ concerned with the expectations of the prices of their houses increasing,a housing bubble occurred.

Accepted Answer

A) less;less 
B) less;more 
C) more;less 
D) more;more 
A) less;less 
B) less;more 
C) more;less 
D) more;more

Question 15

If stricter immigration laws are imposed and many foreign workers in the United States are forced to go back to their home countries,

Accepted Answer

A) the long-run aggregate supply curve will shift to the right. 
B) the long-run aggregate supply curve will shift to the left. 
C) we will move up along the long-run aggregate supply curve. 
D) we will move down along the long-run aggregate supply curve. 
A) the long-run aggregate supply curve will shift to the right. 
B) the long-run aggregate supply curve will shift to the left. 
C) we will move up along the long-run aggregate supply curve. 
D) we will move down along the long-run aggregate supply curve.

Question 16

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Accepted Answer

A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A. 
A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A.

Question 17

Figure 13-1  
-Refer to Figure 13-1.Ceteris paribus,a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from

Accepted Answer

A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A. 
A) AD1 to AD2. 
B) AD2 to AD1. 
C) point A to point B. 
D) point B to point A.

Question 18

Spending on the war in Afghanistan is essentially categorized as government purchases.How do decreases in spending on the war in Afghanistan affect the aggregate demand curve?

Accepted Answer

A) They will move the economy down along a stationary aggregate demand curve. 
B) They will move the economy up along a stationary aggregate demand curve. 
C) They will shift the aggregate demand curve to the right. 
D) They will shift the aggregate demand curve to the left. 
A) They will move the economy down along a stationary aggregate demand curve. 
B) They will move the economy up along a stationary aggregate demand curve. 
C) They will shift the aggregate demand curve to the right. 
D) They will shift the aggregate demand curve to the left.

Question 19

When the aggregate demand curve and the short-run aggregate supply curve intersect,

Accepted Answer

A) the long-run aggregate supply curve must also intersect at the same point. 
B) inflation must be increasing. 
C) structural and frictional unemployment equal zero. 
D) the economy is in short-run macroeconomic equilibrium. 
A) the long-run aggregate supply curve must also intersect at the same point. 
B) inflation must be increasing. 
C) structural and frictional unemployment equal zero. 
D) the economy is in short-run macroeconomic equilibrium.

Question 20

What is a supply shock,and why might a supply shock lead to stagflation?

Accepted Answer

A supply shock is an unexpected event th

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in personal income taxes would be represented by a movement from

The invention of the integrated circuit by Jack Kilby of Texas Instruments gave rise to the information age.What did this technological change do the short-run supply curve?

Using an aggregate demand graph,illustrate the impact of an increase in the growth rate of U.S.GDP relative to the growth rate of foreign GDP.

Figure 13-4 -Refer to Figure 13-4.In the figure above,AD1,LRAS1 and SRAS1 denote AD,LRAS and SRAS in year 1,while AD2,LRAS2 and SRAS2 denote AD,LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

An increase in government spending will result in an increase in the price level and an increase in real GDP in the long run.

The recession of 2007-2009 made many consumers pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in the price level would be represented by a movement from

An increase in the price level shifts the aggregate demand curve to the left.

If the economy receives an influx of new workers from immigration,

Which of the following will shift the aggregate demand curve to the right,ceteris paribus?

When people became concerned with the underlying value of their houses and became concerned with the expectations of the prices of their houses increasing,a housing bubble occurred.

If stricter immigration laws are imposed and many foreign workers in the United States are forced to go back to their home countries,

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from

Spending on the war in Afghanistan is essentially categorized as government purchases.How do decreases in spending on the war in Afghanistan affect the aggregate demand curve?

When the aggregate demand curve and the short-run aggregate supply curve intersect,

What is a supply shock,and why might a supply shock lead to stagflation?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 13: Aggregate Demand and Aggregate Supply Analysis

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule.

Which of the following is one explanation as to why the aggregate demand curve slopes downward?

Declines in spending on residential construction are often due to increases in interest rates.The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates.

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in personal income taxes would be represented by a movement from

The invention of the integrated circuit by Jack Kilby of Texas Instruments gave rise to the information age.What did this technological change do the short-run supply curve?

Using an aggregate demand graph,illustrate the impact of an increase in the growth rate of U.S.GDP relative to the growth rate of foreign GDP.

Figure 13-4 -Refer to Figure 13-4.In the figure above,AD1,LRAS1 and SRAS1 denote AD,LRAS and SRAS in year 1,while AD2,LRAS2 and SRAS2 denote AD,LRAS and SRAS in year 2.Given the economy is at point A in year 1,what is the actual growth rate in GDP in year 2?

An increase in government spending will result in an increase in the price level and an increase in real GDP in the long run.

The recession of 2007-2009 made many consumers pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

Figure 13-2 -Refer to Figure 13-2.Ceteris paribus,a decrease in the price level would be represented by a movement from

An increase in the price level shifts the aggregate demand curve to the left.

If the economy receives an influx of new workers from immigration,

Which of the following will shift the aggregate demand curve to the right,ceteris paribus?

When people became ________ concerned with the underlying value of their houses and became ________ concerned with the expectations of the prices of their houses increasing,a housing bubble occurred.

If stricter immigration laws are imposed and many foreign workers in the United States are forced to go back to their home countries,

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in households' expectations of their future income would be represented by a movement from

Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from

Spending on the war in Afghanistan is essentially categorized as government purchases.How do decreases in spending on the war in Afghanistan affect the aggregate demand curve?

When the aggregate demand curve and the short-run aggregate supply curve intersect,

What is a supply shock,and why might a supply shock lead to stagflation?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The proponents of and think that the Federal Reserve should adopt a constant monetary growth rule.

When people became concerned with the underlying value of their houses and became concerned with the expectations of the prices of their houses increasing,a housing bubble occurred.