Question 1

The equilibrium price level and level of real output occur where:

Accepted Answer

A)   real output is at its highest possible level.
B)   exports equal imports.
C)   the price level is at its lowest level.
D)   the aggregate demand and supply curves intersect.E) C) and D)
F) B) and D)

Question 2

-Which of the above diagrams best portrays the effects of a dramatic increase in energy prices?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and B)
F) C) and D)

Question 3

Which of the following explains why the aggregate demand schedule is downward sloping?

Accepted Answer

A)   the real-balances effect
B)   the interest rate effect
C)   the foreign trade effect
D)   all of the aboveE) B) and C)
F) C) and D)

Question 4

The following list of items are related to aggregate demand and/or aggregate supply.
 
-Refer to the above list.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) A) and C)
F) C) and D)

Question 5

The determinants of aggregate supply:

Accepted Answer

A)   are consumption,investment,government,and net export spending.
B)   explain why real domestic output and the price level are directly related.
C)   explain the three distinct ranges of the aggregate supply curve.
D)   include input prices and r productivity.E) A) and B)
F) B) and D)

Question 6

If real output rises and the price level falls,this would likely be due to a:

Accepted Answer

A)   rightward shift of the aggregate demand curve.
B)   leftward shift of the aggregate demand curve.
C)   rightward shift of the aggregate supply curve.
D)   leftward shift of the aggregate supply curve.E) A) and C)
F) B) and C)

Question 7

1 to AS2. B)  shift in the aggregate supply curve from AS1 to AS3. C)  shift in the aggregate supply curve from AS2 to AS3. D)  movement along the aggregate demand curve from e1 to e3." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram.Cost-push inflation can be illustrated by a:

Accepted Answer

A)   shift in the aggregate supply curve from AS1 to AS2.
B)   shift in the aggregate supply curve from AS1 to AS3.
C)   shift in the aggregate supply curve from AS2 to AS3.
D)   movement along the aggregate demand curve from e1 to e3.E) None of the above
F) B) and C)

Question 8

When deriving the aggregate demand (AD) curve from the aggregate expenditure model,an increase in Canadian product prices would cause:

Accepted Answer

A)   an increase in the value of household wealth and reduced consumption expenditures.
B)   an increase in interest rates and lower investment expenditures.
C)   an increase in exports and imports.
D)   an increase in Canadian resource prices and an increase in aggregate supply.E) C) and D)
F) None of the above

Question 9

The following aggregate demand and supply schedules are for a hypothetical economy:
 
-Refer to the above data.If the price level is 150 and producers supply $300 of real output:

Accepted Answer

A)   a shortage of real output of $200 will occur.
B)   a shortage of real output of $100 will occur.
C)   a surplus of real output of $300 will occur.
D)   neither a shortage nor a surplus of real output will occur.E) All of the above
F) A) and D)

Question 10

Which of the following would not shift the aggregate supply curve?

Accepted Answer

A)   an increase in labour productivity
B)   a decline in the price of imported oil
C)   a decline in business taxes
D)   an increase in the price levelE) B) and C)
F) C) and D)

Question 11

The shape of the aggregate demand curve is explained by the:

Accepted Answer

A)   interest rate,real balances,and foreign trade effects.
B)   rate of inflation and the natural rate of unemployment.
C)   policies to stabilize prices and reduce unemployment.
D)   ratchet effect.E) A) and B)
F) A) and C)

Question 12

Which one of the following would increase per unit production cost and therefore shift the aggregate supply curve to the left?

Accepted Answer

A)   a reduction in business taxes
B)   an increase in the number of resources used in production
C)   an increase in the price of imported resources
D)   deregulation of industryE) A) and D)
F) A) and B)

Question 13

Using the aggregate demand-aggregate supply (short-run)model,explain how the depreciation of the Canadian dollar in terms of foreign currencies would affect the economy.

Accepted Answer

The depreciation of the Canadian dollar ...

Question 14

The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy:
 
-Refer to the above information,the level of productivity is:

Accepted Answer

A)   2
B)   .5.
C)   4
D)   200E) None of the above
F) All of the above

Question 15

Wage contracts,efficiency wages,and the minimum wage are explanations for why:

Accepted Answer

A)   competition results in price wars.
B)   wages tend to be inflexible downward.
C)   the aggregate demand curve slopes downward.
D)   there is little support for the existence of a real-balances effect.E) All of the above
F) B) and D)

Question 16

A decrease in interest rates caused by a change in the price level would cause a(n) :

Accepted Answer

A)   decrease in aggregate demand.
B)   increase in aggregate demand.
C)   decrease in the quantity of real domestic output demanded.
D)   increase in the quantity of real domestic output demanded.E) A) and C)
F) A) and B)

Question 17

The relationship between the aggregate demand curve and the aggregate expenditures model is shown in the fact that:

Accepted Answer

A)   a decrease in the price level shifts the aggregate expenditures schedule downward and decreases real GDP.
B)   a decrease in the price level shifts the aggregate expenditures schedule upward and increases real GDP.
C)   an increase in the price level shifts the aggregate expenditures schedule upward and increases real GDP.
D)   an increase in the price level shifts the aggregate expenditures schedule downward and increases real GDP.E) C) and D)
F) A) and D)

Question 18

Other things equal,an increase in the price level will:

Accepted Answer

A)   shift the short run aggregate supply curve to the right.
B)   shift the aggregate demand curve to the right.
C)   cause a movement up along a short-run aggregate supply curve.
D)   cause a movement down a short run aggregate supply curve.E) B) and D)
F) B) and C)

Question 19

Explain the relationship between the aggregate expenditures model in graph (A)below and the aggregate demand model in graph (B)below where aggregate demand is shifting.

Accepted Answer

In (A)we assume that some determinant of...

Question 20

The recession that began in 2008 dispelled the idea of The Great Moderation.

Accepted Answer

A) True 
 B)False

Exam 12: Aggregate Demand and Aggregate Supply

Using the aggregate demand-aggregate supply (short-run)model,explain how the depreciation of the Canadian dollar in terms of foreign currencies would affect the economy.

Correct AnswerverifiedThe depreciation of the Canadian dollar ...View AnswerShow Answer

The recession that began in 2008 dispelled the idea of The Great Moderation.

Correct AnswerverifiedShow Answer

The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy: -Refer to the above information,the level of productivity is:

Correct AnswerverifiedShow Answer

Explain the relationship between the aggregate expenditures model in graph (A)below and the aggregate demand model in graph (B)below where aggregate demand is shifting.

Correct AnswerverifiedIn (A)we assume that some determinant of...View AnswerShow Answer

The determinants of aggregate supply:

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The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data.If the price level is 150 and producers supply $300 of real output:

Correct AnswerverifiedShow Answer

-Which of the above diagrams best portrays the effects of a dramatic increase in energy prices?

Correct AnswerverifiedShow Answer

The shape of the aggregate demand curve is explained by the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Wage contracts,efficiency wages,and the minimum wage are explanations for why:

Correct AnswerverifiedShow Answer

Which of the following explains why the aggregate demand schedule is downward sloping?

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When deriving the aggregate demand (AD) curve from the aggregate expenditure model,an increase in Canadian product prices would cause:

Correct AnswerverifiedShow Answer

The relationship between the aggregate demand curve and the aggregate expenditures model is shown in the fact that:

Correct AnswerverifiedShow Answer

Other things equal,an increase in the price level will:

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-Refer to the above diagram.Cost-push inflation can be illustrated by a:

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A decrease in interest rates caused by a change in the price level would cause a(n) :

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Which of the following would not shift the aggregate supply curve?

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Which one of the following would increase per unit production cost and therefore shift the aggregate supply curve to the left?

Correct AnswerverifiedShow Answer

The equilibrium price level and level of real output occur where:

Correct AnswerverifiedShow Answer

If real output rises and the price level falls,this would likely be due to a:

Correct AnswerverifiedShow Answer

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The depreciation of the Canadian dollar ...
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In (A)we assume that some determinant of...
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