Question 1

Recessions in China and India would cause

Accepted Answer

A)  the U.S. price level and real GDP to rise.
B)  the U.S. price level and real GDP to fall.
C)  the U.S. price level to rise and real GDP to fall.
D)  the U.S. price level to fall and real GDP to rise.E) B) and C)
F) A) and B)

Question 2

Most macroeconomic variables that measure some type of income, spending, or production fluctuate closely together.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Accepted Answer

A)  The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply.
B)  The price level and quantity of output adjust to bring aggregate demand and supply into balance.
C)  The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 4

The long-run aggregate supply curve would shift right if the government were to

Accepted Answer

A)  increase the minimum-wage.
B)  make unemployment benefits more generous.
C)  raise taxes on investment spending.
D)  None of the above is correct.E) All of the above
F) A) and C)

Question 5

In which case can we be sure real GDP rises in the short run?

Accepted Answer

A)  foreign economies expand and taxes rise
B)  foreign economies expand and taxes fall
C)  foreign economies contract and taxes fall
D)  None of the above are correct.E) A) and C)
F) A) and B)

Question 6

Economists mostly agree that the Great Depression was principally caused by factors that shifted short-run aggregate supply left.

Accepted Answer

A) True 
 B)False

Question 7

Other things the same, an increase in the expected price level shifts

Accepted Answer

A)  short-run aggregate supply right.
B)  short-run aggregate supply left.
C)  aggregate-demand right.
D)  aggregated-demand left.E) All of the above
F) None of the above

Question 8

Consider the exhibit below for the following questions.Figure 20-1 
-Refer to Figure 20-1. The economy would be moving to long-run equilibrium if it started at

Accepted Answer

A)  A and moved to B.
B)  C and moved to B.
C)  D and moved to C.
D)  None of the above is correct.E) C) and D)
F) A) and B)

Question 9

Which of the following explains why production rises in most years?

Accepted Answer

A)  increases in the labor force
B)  increases in the capital stock
C)  advances in technological knowledge
D)  All of the above are correct.E) A) and C)
F) A) and B)

Question 10

Which of the following both shift aggregate demand right?

Accepted Answer

A)  net exports rise for some reason other than a price change and the money supply rises.
B)  net exports rise for some reason other than a price change and the price level rises.
C)  net exports fall for some reason other than a price change and the money supply rises.
D)  net exports fall for some reason other than a price change and the price level rises.E) A) and B)
F) C) and D)

Question 11

Economic expansions in Germany and Japan would cause

Accepted Answer

A)  the U.S. price level and real GDP to rise.
B)  the U.S. price level and real GDP to fall.
C)  the U.S. price level to rise and real GDP to fall.
D)  the U.S. price level to fall and real GDP to rise.E) All of the above
F) None of the above

Question 12

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

Accepted Answer

A) True 
 B)False

Question 13

Make a list of things that would shift the long-run aggregate supply curve to the right.

Accepted Answer

Examples in the text (or variations) inc...

Question 14

Which of the following correctly describes actions of the U.S. government during the recession of 2008-2009?

Accepted Answer

A)  It refused to provide banks funding and made no significant changes in government spending.
B)  It refused to provide banks funding but made a large increase in government spending.
C)  It became part owner of some banks but made no significant change in government spending
D)  It became part owner of some banks and made a large increase in government spending.E) None of the above
F) B) and C)

Question 15

The recessions associated with the business cycle come at regular intervals.

Accepted Answer

A) True 
 B)False

Question 16

In order to understand how the economy works in the short run, we need to

Accepted Answer

A)  study the classical model.
B)  study a model in which real and nominal variables interact.
C)  understand that "money is a veil."
D)  understand that money is neutral in the short run.E) A) and B)
F) A) and C)

Question 17

Which of the following did not happen during the onset of the Great Depression?

Accepted Answer

A)  The money supply fell as households took money out of bank deposits.
B)  The Fed conducted expansionary monetary policy.
C)  Stock prices fell about 90 percent.
D)  Disruption of the banking system made it difficult for some firms to obtain funds for investment.E) B) and C)
F) C) and D)

Question 18

Recession come at

Accepted Answer

A)  regular intervals. During recessions consumption spending falls relatively more than investment spending.
B)  regular intervals. During recessions investment spending falls relatively more than consumption spending.
C)  irregular intervals. During recessions consumption spending falls relatively more than investment spending.
D)  irregular intervals. During recessions investment spending falls relatively more than consumption spending.E) B) and D)
F) None of the above

Question 19

Sticky nominal wages can result in

Accepted Answer

A)  lower profits for firms when the price level is lower than expected.
B)  a decrease in real wages when the price level is lower than expected.
C)  a short-run aggregate-supply curve that is vertical.
D)  a long-run aggregate-supply curve that is upward-sloping.E) A) and D)
F) B) and C)

Question 20

The classical dichotomy and monetary neutrality are represented graphically by

Accepted Answer

A)  an upward-sloping long-run aggregate-supply curve.
B)  a vertical long-run aggregate-supply curve.
C)  an upward-sloping short-run aggregate-curve.
D)  a downward-sloping aggregate-demand curve.E) B) and D)
F) B) and C)

Exam 20: Aggregate Demand and Aggregate Supply

Economists mostly agree that the Great Depression was principally caused by factors that shifted short-run aggregate supply left.

Correct AnswerverifiedShow Answer

Recession come at

Correct AnswerverifiedShow Answer

Most macroeconomic variables that measure some type of income, spending, or production fluctuate closely together.

Correct AnswerverifiedShow Answer

Consider the exhibit below for the following questions.Figure 20-1 -Refer to Figure 20-1. The economy would be moving to long-run equilibrium if it started at

Correct AnswerverifiedShow Answer

The recessions associated with the business cycle come at regular intervals.

Correct AnswerverifiedShow Answer

Which of the following both shift aggregate demand right?

Correct AnswerverifiedShow Answer

Which of the following explains why production rises in most years?

Correct AnswerverifiedShow Answer

Sticky nominal wages can result in

Correct AnswerverifiedShow Answer

Make a list of things that would shift the long-run aggregate supply curve to the right.

Correct AnswerverifiedExamples in the text (or variations) inc...View AnswerShow Answer

The classical dichotomy and monetary neutrality are represented graphically by

Correct AnswerverifiedShow Answer

Which of the following correctly describes actions of the U.S. government during the recession of 2008-2009?

Correct AnswerverifiedShow Answer

Which of the following statements concerning the aggregate demand and aggregate supply model is correct?

Correct AnswerverifiedShow Answer

An increase in the expected price level shifts the short-run aggregate supply curve to the right.

Correct AnswerverifiedShow Answer

In order to understand how the economy works in the short run, we need to

Correct AnswerverifiedShow Answer

Other things the same, an increase in the expected price level shifts

Correct AnswerverifiedShow Answer

Economic expansions in Germany and Japan would cause

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve would shift right if the government were to

Correct AnswerverifiedShow Answer

In which case can we be sure real GDP rises in the short run?

Correct AnswerverifiedShow Answer

Recessions in China and India would cause

Correct AnswerverifiedShow Answer

Which of the following did not happen during the onset of the Great Depression?

Correct AnswerverifiedShow Answer

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Examples in the text (or variations) inc...
View Answer

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