Question 1

The aggregate demand curve shifts right if either

Accepted Answer

A)   speculators gain confidence in U.S.assets or foreign countries enter into recession.
B)   speculators gain confidence in U.S.assets or recessions in foreign countries end.
C)   speculators lose confidence in U.S.assets or foreign countries enter into recession.
D)   speculators lose confidence in U.S.assets or recessions in foreign countries end.E) B) and C)
F) A) and B)

Question 2

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 3

Suppose a stock market crash makes people feel poorer.This decrease in wealth would induce people to

Accepted Answer

A)   decrease consumption,which shifts aggregate supply left.
B)   decrease consumption,which shifts aggregate demand left.
C)   increase consumption,which shifts aggregate supply right.
D)   increase consumption,which shifts aggregate demand right.E) B) and C)
F) A) and C)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

Other things the same,a decrease in the price level makes consumers feel

Accepted Answer

A)   less wealthy,so the quantity of goods and services demanded falls.
B)   less wealthy,so the quantity of goods and services demanded rises.
C)   more wealthy,so the quantity of goods and services demanded rises.
D)   more wealthy,so the quantity of goods and services demanded falls.E) None of the above
F) A) and D)

Question 7

Of the following theories,which is consistent with a vertical long-run aggregate supply curve?

Accepted Answer

A)   the sticky-wage theory
B)   misperceptions theory
C)   both the sticky-wage and misperceptions theories.
D)   neither the sticky-wage nor the misperceptions theory.E) B) and C)
F) A) and D)

Question 8

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) B) and C)
F) All of the above

Question 9

The discovery of a large amount of previously-undiscovered oil in the U.S.would shift

Accepted Answer

A)   the long-run aggregate-supply curve to the right.
B)   the long-run aggregate-supply curve to the left.
C)   the aggregate-demand curve to the left.
D)   None of the above is correct.E) All of the above
F) B) and C)

Question 10

The model of aggregate demand and aggregate supply explains the relationship between

Accepted Answer

A)   the price and quantity of a particular good.
B)   unemployment and output.
C)   wages and employment.
D)   real GDP and the price level.E) A) and D)
F) C) and D)

Question 11

Other things the same,an increase in the price level induces people to hold

Accepted Answer

A)   less money,so they lend less,and the interest rate rises.
B)   less money,so they lend more,and the interest rate falls.
C)   more money,so they lend more,and the interest rate falls.
D)   more money,so they lend less,and the interest rate rises.E) All of the above
F) None of the above

Question 12

In the mid-1970s the price of oil rose dramatically.This

Accepted Answer

A)   shifted aggregate supply left.
B)   caused U.S.prices to fall.
C)   was the consequence of OPEC increasing oil production.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 13

Which of the following would help explain why the aggregate demand curve slopes downward?

Accepted Answer

A)   An unexpectedly low price level raises the real wage,which causes firms to hire fewer workers and produce a smaller quantity of goods and services.
B)   A lower price level causes domestic interest rates to rise and the real exchange rate to appreciate,which stimulates spending on net exports.
C)   A higher price level increases real wealth,which stimulates spending on consumption.
D)   A lower price level reduces the interest rate,which encourages greater spending on investment goods.E) A) and B)
F) A) and C)

Question 14

Other things the same,as the price level falls,

Accepted Answer

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

Question 15

Who is credited for the original development of the model of aggregate demand and aggregate supply?

Accepted Answer

The answer of Who is credited for the original development...

Question 16

The wealth effect,interest-rate effect,and exchange-rate effect are all explanations for

Accepted Answer

A)   the slope of short-run aggregate supply.
B)   the slope of long-run aggregate supply.
C)   the slope of the aggregate-demand curve.
D)   everything that makes the aggregate-demand curve shift.E) None of the above
F) A) and B)

Question 17

Which of the following alone can explain the change in the price level and output during World War II?

Accepted Answer

A)   aggregate demand shifted right
B)   aggregate demand shifted left
C)   aggregate supply shifted right
D)   aggregate supply shifted leftE) A) and D)
F) C) and D)

Question 18

Figure 20-1 
-Refer to Figure 20-1.If the economy starts at A and moves to D in the short run,the economy

Accepted Answer

A)   moves to A in the long run.
B)   moves to B in the long run.
C)   moves to C in the long run.
D)   stays at D in the long run.E) A) and C)
F) C) and D)

Question 19

Make a list of expenditures whose sum equals GDP.

Accepted Answer

consumption,investme...

Question 20

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) B) and C)

Exam 33: Aggregate Demand and Aggregate Supply

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

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Other things the same,as the price level falls,

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Other things the same,a decrease in the price level makes consumers feel

Correct AnswerverifiedShow Answer

The discovery of a large amount of previously-undiscovered oil in the U.S.would shift

Correct AnswerverifiedShow Answer

In the mid-1970s the price of oil rose dramatically.This

Correct AnswerverifiedShow Answer

Which of the following alone can explain the change in the price level and output during World War II?

Correct AnswerverifiedShow Answer

The model of aggregate demand and aggregate supply explains the relationship between

Correct AnswerverifiedShow Answer

Economic expansions in Germany and Japan would cause

Correct AnswerverifiedShow Answer

Of the following theories,which is consistent with a vertical long-run aggregate supply curve?

Correct AnswerverifiedShow Answer

Recessions in China and India would cause

Correct AnswerverifiedShow Answer

The wealth effect,interest-rate effect,and exchange-rate effect are all explanations for

Correct AnswerverifiedShow Answer

Which of the following would help explain why the aggregate demand curve slopes downward?

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Who is credited for the original development of the model of aggregate demand and aggregate supply?

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Which of the following both shift aggregate demand right?

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Suppose a stock market crash makes people feel poorer.This decrease in wealth would induce people to

Correct AnswerverifiedShow Answer

The aggregate demand curve shifts right if either

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Other things the same,an increase in the price level induces people to hold

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Make a list of expenditures whose sum equals GDP.

Correct Answerverifiedconsumption,investme...View AnswerShow Answer

Figure 20-1 -Refer to Figure 20-1.If the economy starts at A and moves to D in the short run,the economy

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

Correct AnswerverifiedShow Answer

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consumption,investme...
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