Question 1

Minimum wage laws tend to make the price level more flexible rather than less flexible.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Accepted Answer

A)   Move the economy to point A
B)   Move the economy to point B
C)   Move the economy to point D
D)   Shift the AD curve to the leftE) None of the above
F) All of the above

Question 3

When national income in other nations decreases, aggregate demand in our economy:

Accepted Answer

A)   Increases because our exports will increase
B)   Decreases because our exports will decrease
C)   Increases because our imports will decrease
D)   Decreases because our imports will increaseE) B) and C)
F) None of the above

Question 4

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

Accepted Answer

A)   The interest-rate effect
B)   The real-balances effect
C)   A change in the degree of excess capacity
D)   A change in real value of consumer wealthE) A) and B)
F) B) and C)

Question 5

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Accepted Answer

A)   Increase from $40 to $90 and aggregate supply would decrease
B)   Increase from $50 to $60 and aggregate supply would decrease
C)   Increase from $60 to $70 and aggregate supply would increase
D)   Remain unchanged but aggregate supply would increaseE) C) and D)
F) A) and C)

Question 6

If the cost of resources decreases, then real domestic output will increase.

Accepted Answer

A) True 
 B)False

Question 7

2, then a further increase in consumption and investment spending will cause: A)  Cost-push inflation, and the new equilibrium output will be less than Q2 B)  Demand-pull inflation, and the new equilibrium output will be less than Q2 C)  Demand-pull inflation, and the new equilibrium output will be more than Q2 D)  Cost-push inflation, and the new equilibrium output will be more than Q2" class="answers-bank-image d-inline" rel="preload" > Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:

Accepted Answer

A)   Cost-push inflation, and the new equilibrium output will be less than Q2
B)   Demand-pull inflation, and the new equilibrium output will be less than Q2
C)   Demand-pull inflation, and the new equilibrium output will be more than Q2
D)   Cost-push inflation, and the new equilibrium output will be more than Q2E) A) and B)
F) A) and C)

Question 8

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Accepted Answer

A) True 
 B)False

Question 9

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply.  Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Accepted Answer

A)   1 and 2
B)   2 and 10
C)   3 and 6
D)   7 and 8E) B) and C)
F) A) and D)

Question 10

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy.  Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Accepted Answer

A)   150 and $2500
B)   250 and $2500
C)   200 and $2000
D)   300 and $3000E) A) and B)
F) B) and D)

Question 11

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) A) and C)
F) A) and D)

Question 12

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

Accepted Answer

A)   Cost-push inflation and rising output
B)   Demand-pull inflation and rising output
C)   Cost-push inflation and falling output
D)   Demand-pull inflation and falling outputE) None of the above
F) A) and B)

Exam 12: Aggregate Demand and Aggregate Supply

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Correct Answer
verified

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Correct Answer
verified

When national income in other nations decreases, aggregate demand in our economy:

Correct Answer
verified

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Correct Answer
verified

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

Correct Answer
verified

Minimum wage laws tend to make the price level more flexible rather than less flexible.

Correct Answer
verified

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Correct Answer
verified

If the cost of resources decreases, then real domestic output will increase.

Correct Answer
verified

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Correct Answer
verified

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply. Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Correct Answer
verified

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD₂, then a further increase in consumption and investment spending will cause:

Correct Answer
verified

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

Correct Answer
verified

Exam 12: Aggregate Demand and Aggregate Supply

Refer to the graph above, which shows an aggregate demand. If the economy is at point C and the price level increases by 100, then the wealth, interest-rate, and foreign purchases effects will:

Correct AnswerverifiedShow Answer

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

Correct AnswerverifiedShow Answer

When national income in other nations decreases, aggregate demand in our economy:

Correct AnswerverifiedShow Answer

It shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the table above. If the quantity of real domestic output demanded increased by $1000 at each price level, the new equilibrium price level and quantity of real domestic output would be:

Correct AnswerverifiedShow Answer

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

Correct AnswerverifiedShow Answer

Minimum wage laws tend to make the price level more flexible rather than less flexible.

Correct AnswerverifiedShow Answer

Depreciation of the dollar relative to foreign currencies will tend to increase net exports and thus aggregate demand of the U.S. economy.

Correct AnswerverifiedShow Answer

If the cost of resources decreases, then real domestic output will increase.

Correct AnswerverifiedShow Answer

Refer to the graph above. Which line might represent an immediate-short-run aggregate supply curve?

Correct AnswerverifiedShow Answer

Answer the question based on the following list of items that are related to aggregate demand and/or aggregate supply. Refer to the list above. Changes in which combination of factors best explain why the aggregate supply curve would shift?

Correct AnswerverifiedShow Answer

Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:

Correct AnswerverifiedShow Answer

In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:

Correct AnswerverifiedShow Answer

Correct Answer
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Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD₂, then a further increase in consumption and investment spending will cause:

Correct Answer
verified

Correct Answer
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