Filters
Question type
Study Flashcards

When the excess capacity of business expands unintentionally, aggregate


A) demand will increase.
B) demand will decrease.
C) supply will increase.
D) supply will decrease.

E) B) and C)
F) B) and D)

Correct Answer

verifed

verified

1. Real-Balances Effect 2. Household Expectations 3. Interest-Rate Effect 4. Personal Income Tax Rates 5. Profit Expectations 6. National Incomes Abroad 7. Government Spending 8. Foreign Purchases Effect 9. Exchange Rates 10. Degree of Excess Capacity Answer the question based on the accompanying list of factors that are related to the aggregate demand curve. Changes in which two of the factors would most likely cause a shift in aggregate demand due to a change in consumer spending?


A) 1 and 3
B) 2 and 4
C) 5 and 10
D) 8 and 9

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

How can the aggregate demand curve be derived from the aggregate expenditures model?

Correct Answer

verifed

verified

A change in the price level alters the l...

View Answer

The determinants of aggregate demand determine the location of the aggregate demand curve. What are the four basic determinants of aggregate demand?

Correct Answer

verifed

verified

The four basic determinants of...

View Answer

An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each Unit of labor, $3. The per-unit cost of production in this economy is


A) $0.05.
B) $0.10.
C) $0.50.
D) $1.00.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

The real-balances, interest-rate, and foreign purchases effects all help explain


A) why the aggregate demand curve is downsloping.
B) why the aggregate supply curve is upsloping.
C) shifts in the aggregate demand curve.
D) shifts in the aggregate supply curve.

E) A) and D)
F) B) and D)

Correct Answer

verifed

verified

1. Government Spending 2. Consumer Expectations 3. Degree of Excess Capacity 4. Personal Income Tax Rates 5. Productivity 6. National Income Abroad 7. Business Taxes 8. Domestic Resource Availability 9. Prices of Imported Products 10. Profit Expectations on Investments Answer the question based on the accompanying list of items related to aggregate demand or aggregate supply. A change in which factor is most likely to change both aggregate demand and aggregate supply?


A) 3
B) 5
C) 7
D) 6

E) B) and D)
F) B) and C)

Correct Answer

verifed

verified

Input QuantityReal Domestic Output100200150300200400\begin{array} { | c | c | } \hline Input ~Quantity & Real ~Domestic ~Output \\\hline 100 & 200 \\\hline 150 & 300 \\\hline 200 & 400 \\\hline\end{array} The table gives information about the relationship between input quantities and real domestic output in a hypothetical economy. If the price of each input is $5\$ 5 , the per-unit cost of production in the economy is


A) $5.
B) $2.75.
C) $2.50.
D) $0.40.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

A) demand-pull inflation in the late 1960s B) cost-push inflation in the early 1970s C) full-employment in the late 1990s D) recession in 2007-09


A) demand-pull inflation in the late 1960s
B) cost-push inflation in the early 1970s
C) full-employment in the late 1990s
D) recession in 2007-09

E) A) and D)
F) None of the above

Correct Answer

verifed

verified

What are the three time horizons used to categorize aggregate supply? What is the difference between the immediate short run and the short-run aggregate supply?

Correct Answer

verifed

verified

The three different time horizons used t...

View Answer

Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. The level of productivity is


A) 20.
B) 10.
C) 5.
D) 2.

E) All of the above
F) A) and C)

Correct Answer

verifed

verified

An aggregate supply curve represents the relationship between the


A) price level and the buying of real domestic output.
B) price level and the production of real domestic output.
C) real domestic output bought and the real domestic output sold.
D) price level that producers are willing to accept and the price level buyers are willing to pay.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

The aggregate demand curve is


A) vertical under conditions of full employment.
B) horizontal when there is considerable unemployment in the economy.
C) downsloping because of the interest-rate, real-balances, and foreign purchases effects.
D) downsloping because production costs decrease as real output rises.

E) B) and D)
F) B) and C)

Correct Answer

verifed

verified

Suppose that an economy produces 2,400 units of output, employing 60 units of input, and the price of the input is $30 per unit. The level of productivity in this economy is


A) 20.
B) 30.
C) 40.
D) 50.

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

Explain cost-push inflation using aggregate demand-aggregate supply analysis.

Correct Answer

verifed

verified

Decreases in aggregate supply cause cost...

View Answer

The long-run aggregate supply analysis assumes that


A) input prices are fixed, while product prices are variable.
B) input prices are variable, while product prices are fixed.
C) both input and product prices are variable.
D) both input and product prices are fixed.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

A) A B) B C) C D) D


A) A
B) B
C) C
D) D

E) A) and D)
F) B) and D)

Correct Answer

verifed

verified

What two factors affect the legal-institutional environment? Discuss the effect of changes in the legal-institutional environment on aggregate supply.

Correct Answer

verifed

verified

The two factors that affect the legal-in...

View Answer

An increase in investment and government spending can be expected to shift the


A) aggregate expenditures curve downward and the aggregate demand curve leftward.
B) aggregate expenditures curve upward and the aggregate demand curve leftward.
C) aggregate expenditures curve downward and the aggregate demand curve rightward.
D) aggregate expenditures curve upward and the aggregate demand curve rightward.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

If the national incomes of our trading partners increase, then our


A) aggregate demand decreases because C decreases.
B) aggregate demand increases because C increases.
C) aggregate demand decreases because net exports decrease.
D) aggregate demand increases because net exports increase.

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

Showing 141 - 160 of 320

Related Exams

Exam 2

The Market System and the Circular Flow

274 Questions

Exam 3

Demand, Supply, and Market Equilibrium

357 Questions

Exam 4

Market Failures Caused by Externalities Asymmetric Information

222 Questions

Exam 5

Public Goods, Public Choice, and Government Failure

242 Questions

Exam 6

An Introduction to Macroeconomics

243 Questions

Exam 7

Measuring Domestic Output and National Income

238 Questions

Exam 8

Economic Growth

274 Questions

Exam 9

Business Cycles, Unemployment, and Inflation

298 Questions

Exam 10

Basic Macroeconomic Relationships

233 Questions

Exam 11

The Aggregate Expenditures Model

126 Questions

Exam 13

Fiscal Policy, Deficits, and Debt

401 Questions

Exam 14

Money, Banking, and Financial Institutions

265 Questions

Exam 15

Money Creation

285 Questions

Exam 16

Interest Rates and Monetary Policy

405 Questions

Exam 17

Financial Economics

356 Questions

Exam 18

Extending the Analysis of Aggregate Supply

268 Questions

Exam 19

Current Issues in Macro Theory and Policy

279 Questions

Exam 20

International Trade

339 Questions

Exam 21

The Balance of Payments, Exchange Rates, and Trade Deficits

315 Questions

Exam 22

The Economics of Developing Countries

269 Questions

Show Answer