Question 1

Other things the same,if the price level rises,people

Accepted Answer

A)   increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases.
B)   increase foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases.
C)   decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange increases.
D)   decrease foreign bond purchases,so the supply of dollars in the market for foreign-currency exchange decreases.

Question 2

The long-run aggregate supply curve would shift right if immigration from abroad

Accepted Answer

A)   increased or Congress made a substantial increase in the minimum wage.
B)   decreased or Congress abolished the minimum wage.
C)   increased or Congress abolished the minimum wage.
D)   decreased or Congress made a substantial increase in the minimum wage.

Question 3

Political Instability Abroad
Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets.
-Refer to Political Instability Abroad.What would the change in the exchange rate make happen to U.S.net exports and U.S.aggregate demand?

Accepted Answer

A)   Net exports would rise which by itself would increase U.S.aggregate demand.
B)   Net exports would rise which by itself would decrease U.S.aggregate demand.
C)   Net exports would fall which by itself would increase U.S.aggregate demand.
D)   Net exports would fall which by itself would decrease U.S.aggregate demand.

Question 4

Other things the same,as the price level rises,

Accepted Answer

A)   the dollar depreciates.
B)   the interest rate falls.
C)   people feel less wealthy.
D)   All of the above are correct.

Question 5

When the dollar depreciates,U.S.

Accepted Answer

A)   exports and imports increase.
B)   exports increase,while imports decrease.
C)   exports decrease,while imports increase.
D)   exports and imports decrease.

Question 6

Pessimism
Suppose the economy is in long-run equilibrium.Then because of corporate scandal,international tensions,and loss of confidence in policymakers,people become pessimistic regarding the future and retain that level of pessimism for some time.
-Refer to Pessimism.Which curve shifts and in which direction?

Accepted Answer

A)   aggregate demand shifts right
B)   aggregate demand shifts left
C)   aggregate supply shifts right.
D)   aggregate supply shifts left.

Question 7

Historical evidence for the U.S.economy indicates that

Accepted Answer

A)   recessions have occurred roughly once every six years since the 1960s.
B)   the unemployment rate usually decreases during a recession and increases shortly after the recession ends.
C)   real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends.
D)   changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle.

Question 8

Which of the following shifts the short-run aggregate supply curve to the right?

Accepted Answer

A)   a decrease in the actual price level
B)   an increase in the actual price level
C)   a decrease in the expected price level
D)   an increase in the expected price level

Question 9

The price level rises in the short run if

Accepted Answer

A)   aggregate demand or aggregate supply shifts right.
B)   aggregate demand shifts right or aggregate supply shifts left.
C)   aggregate demand shifts left or aggregate supply shifts right.
D)   aggregate demand or aggregate supply shifts right

Question 10

If aggregate demand and aggregate supply both shift right,we can be sure that the price level is higher in the short run.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following rises during recessions?

Accepted Answer

A)   layoffs and consumer spending
B)   layoffs but not consumer spending
C)   consumer spending but not layoffs
D)   neither layoffs nor consumer spending

Question 12

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP,argue that declines in these variables are to be expected.

Accepted Answer

Variables that fall along with real GDP ...

Question 13

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Accepted Answer

A) True 
 B)False

Question 14

During World War II government expenditures increased almost five-fold and output almost doubled.

Accepted Answer

A) True 
 B)False

Question 15

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.

Question 16

As the price level falls

Accepted Answer

A)   people will want to buy more bonds,so the interest rate rises.
B)   people will want to buy fewer bonds,so the interest rate falls.
C)   people will want to buy more bonds,so the interest rate falls.
D)   people will want to buy fewer bonds,so the interest rate rises.

Question 17

Aggregate demand shifts right if

Accepted Answer

A)   taxes rise and shifts left if stock prices rise.
B)   taxes rise and shifts left if stock prices fall.
C)   taxes fall and shifts left if stock prices rise.
D)   taxes fall and shifts left is stock prices fall.

Question 18

During World War II,the economy's production increased about

Accepted Answer

A)   25 percent and prices rose about 5 percent.
B)   50 percent and prices rose about 10 percent.
C)   75 percent and prices rose about 15 percent.
D)   100 percent and prices rose about 20 percent.

Question 19

A decrease in the availability of an important major resource such as oil shifts

Accepted Answer

A)   aggregate supply right.
B)   aggregate supply left.
C)   aggregate demand right.
D)   aggregate demand left.

Question 20

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)incl...

Exam 23: Aggregate Demand and Aggregate Supply

During World War II,the economy's production increased about

Correct Answer
verified

During World War II government expenditures increased almost five-fold and output almost doubled.

Correct Answer
verified

If aggregate demand and aggregate supply both shift right,we can be sure that the price level is higher in the short run.

Correct Answer
verified

Other things the same,if the price level rises,people

Correct Answer
verified

The price level rises in the short run if

Correct Answer
verified

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP,argue that declines in these variables are to be expected.

Correct Answer
verified
Variables that fall along with real GDP ...
View Answer

Correct Answer
verified

A decrease in the availability of an important major resource such as oil shifts

Correct Answer
verified

As the price level falls

Correct Answer
verified

Which of the following shifts the short-run aggregate supply curve to the right?

Correct Answer
verified

Other things the same,as the price level rises,

Correct Answer
verified

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

Correct Answer
verified
Examples in the text (or variations)incl...
View Answer

Which of the following rises during recessions?

Correct Answer
verified

Historical evidence for the U.S.economy indicates that

Correct Answer
verified

When the dollar depreciates,U.S.

Correct Answer
verified

The long-run aggregate supply curve would shift right if immigration from abroad

Correct Answer
verified

Aggregate demand shifts right if

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Correct Answer
verified

Exam 23: Aggregate Demand and Aggregate Supply

During World War II,the economy's production increased about

Correct AnswerverifiedShow Answer

During World War II government expenditures increased almost five-fold and output almost doubled.

Correct AnswerverifiedShow Answer

If aggregate demand and aggregate supply both shift right,we can be sure that the price level is higher in the short run.

Correct AnswerverifiedShow Answer

Other things the same,if the price level rises,people

Correct AnswerverifiedShow Answer

The price level rises in the short run if

Correct AnswerverifiedShow Answer

What variables besides real GDP tend to decline during recessions? Given the definition of real GDP,argue that declines in these variables are to be expected.

Correct AnswerverifiedVariables that fall along with real GDP ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A decrease in the availability of an important major resource such as oil shifts

Correct AnswerverifiedShow Answer

As the price level falls

Correct AnswerverifiedShow Answer

Which of the following shifts the short-run aggregate supply curve to the right?

Correct AnswerverifiedShow Answer

Other things the same,as the price level rises,

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)incl...View AnswerShow Answer

Which of the following rises during recessions?

Correct AnswerverifiedShow Answer

Historical evidence for the U.S.economy indicates that

Correct AnswerverifiedShow Answer

When the dollar depreciates,U.S.

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve would shift right if immigration from abroad

Correct AnswerverifiedShow Answer

Aggregate demand shifts right if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Other things the same,as the price level falls,the exchange rate rises.A rise in the exchange rate leads to a decrease in net exports.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Variables that fall along with real GDP ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Examples in the text (or variations)incl...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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