Question 1

The relationship between government spending and the price level:

Accepted Answer

A)  explains the upward-sloping aggregate demand curve.
B)  explains the downward-sloping aggregate demand curve.
C)  explains the perfect elasticity of the aggregate demand curve.
D)  None of these is true.E) A) and C)
F) B) and C)

Question 2

As the U.S.price level decreases,expenditures by which of the following will remain unaffected?

Accepted Answer

A)  Consumers
B)  Businesses
C)  The rest of the world
D)  All of these are true.E) B) and D)
F) A) and D)

Question 3

If U.S.prices increase relative to the rest of the world,we would expect:

Accepted Answer

A)  imports to increase and exports to fall.
B)  imports to decrease and exports to increase.
C)  imports and exports to increase.
D)  imports and exports to decrease.E) A) and B)
F) A) and C)

Question 4

When the economy produces less than its potential output,it is:

Accepted Answer

A)  called a recession.
B)  not in long-run equilibrium.
C)  producing a quantity less than the long-run aggregate supply quantity.
D)  All of these are true.E) A) and D)
F) None of the above

Question 5

The long-run aggregate supply curve will shift to the right if:

Accepted Answer

A)  the potential output of the economy expands.
B)  the economy loses productive capacity.
C)  the economy experiences a supply shock.
D)  The long-run aggregate supply curve is fixed,and does not move.E) A) and B)
F) A) and C)

Question 6

Because the prices of final goods and services tend to increase more quickly than the prices of inputs,the short run aggregate supply curve is:

Accepted Answer

A)  upward sloping.
B)  downward sloping.
C)  perfectly elastic.
D)  perfectly inelastic.E) None of the above
F) A) and C)

Question 7

If a natural disaster were to cause a negative long-run supply shock to the economy,once the economy adjusts,the new equilibrium will be:

Accepted Answer

A)  at a higher price level and lower level of output.
B)  at a lower price level and higher level of output.
C)  at a higher price level and higher level of output.
D)  at a lower price level and lower level of output.E) A) and B)
F) B) and C)

Question 8

A sudden increase in immigration would be considered a:

Accepted Answer

A)  short-run supply shock.
B)  long-run supply shock.
C)  interest-rate shock.
D)  A change in immigration would not affect any of these.E) A) and C)
F) A) and B)

Question 9

In the short run,the aggregate supply curve reacts to:

Accepted Answer

A)  price changes.
B)  wage warfare.
C)  cartels.
D)  price ceilings.E) A) and C)
F) B) and D)

Question 10

The downward sloping aggregate demand curve can be explained in part through:

Accepted Answer

A)  the positive relationship between the price level and net exports.
B)  the positive relationship between the price level and consumption.
C)  the negative relationship between the price level and investment spending.
D)  All of these are true.E) B) and D)
F) C) and D)

Question 11

Consumption:

Accepted Answer

A)  is a major component of aggregate demand.
B)  is negatively related to the national price level.
C)  measures people's expenditures on real goods and services.
D)  All of these are true.E) A) and B)
F) B) and C)

Exam 28: Aggregate Demand and Aggregate Supply

If a natural disaster were to cause a negative long-run supply shock to the economy,once the economy adjusts,the new equilibrium will be:

Correct Answer
verified

A sudden increase in immigration would be considered a:

Correct Answer
verified

As the U.S.price level decreases,expenditures by which of the following will remain unaffected?

Correct Answer
verified

Because the prices of final goods and services tend to increase more quickly than the prices of inputs,the short run aggregate supply curve is:

Correct Answer
verified

If U.S.prices increase relative to the rest of the world,we would expect:

Correct Answer
verified

The long-run aggregate supply curve will shift to the right if:

Correct Answer
verified

Consumption:

Correct Answer
verified

When the economy produces less than its potential output,it is:

Correct Answer
verified

The relationship between government spending and the price level:

Correct Answer
verified

The downward sloping aggregate demand curve can be explained in part through:

Correct Answer
verified

In the short run,the aggregate supply curve reacts to:

Correct Answer
verified

Exam 28: Aggregate Demand and Aggregate Supply

If a natural disaster were to cause a negative long-run supply shock to the economy,once the economy adjusts,the new equilibrium will be:

Correct AnswerverifiedShow Answer

A sudden increase in immigration would be considered a:

Correct AnswerverifiedShow Answer

As the U.S.price level decreases,expenditures by which of the following will remain unaffected?

Correct AnswerverifiedShow Answer

Because the prices of final goods and services tend to increase more quickly than the prices of inputs,the short run aggregate supply curve is:

Correct AnswerverifiedShow Answer

If U.S.prices increase relative to the rest of the world,we would expect:

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve will shift to the right if:

Correct AnswerverifiedShow Answer

Consumption:

Correct AnswerverifiedShow Answer

When the economy produces less than its potential output,it is:

Correct AnswerverifiedShow Answer

The relationship between government spending and the price level:

Correct AnswerverifiedShow Answer

The downward sloping aggregate demand curve can be explained in part through:

Correct AnswerverifiedShow Answer

In the short run,the aggregate supply curve reacts to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified