Question 1

Figure 33-5. 
-Refer to Figure 33-5. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience

Accepted Answer

A)   a falling price level and a falling level of output, as the economy moves to point C.
B)   a falling price level and a rising level of output, as the economy moves to point A.
C)   a rising price level and a falling level of output, as the economy moves to point A.
D)   a rising price level and a rising level of output, as the economy moves to point C.E) A) and B)
F) A) and C)

Question 2

Wages tend to be sticky

Accepted Answer

A)   because of contracts, social norms, and notions of fairness.
B)   because of contracts, but not social norms or notions of fairness.
C)   because of social norms and notions of fairness, but not contracts.
D)   None of the above are correct.E) A) and D)
F) B) and C)

Question 3

In the early 1930s in the United States, there was a

Accepted Answer

A)   large increase in output. In the early 1940s there was also a large increase in output.
B)   large increase in output. In the early 1940s there was a large decrease in output.
C)   large decrease in output. In the early 1940s there was a large increase in output.
D)   large decrease in output. In the early 1940s there was also a large decrease in output.E) B) and C)
F) A) and B)

Question 4

Other things the same, a decrease in the price level motivates 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 rises.
D)   more money, so they lend less, and the interest rate falls.E) B) and C)
F) All of the above

Question 5

The long-run aggregate supply curve shifts left if

Accepted Answer

A)   the capital stock increases.
B)   there is a natural disaster.
C)   the government removes some environmental regulations that limit production methods.
D)   None of the above is correct.E) None of the above
F) A) and D)

Question 6

Figure 33-15. 
-Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Accepted Answer

consumption, investm...

Question 7

Which of the following adjust to bring aggregate supply and demand into balance?

Accepted Answer

A)   the price level and real output
B)   the real rate of interest and the money supply
C)   government expenditures and taxes
D)   the saving rate and net exportsE) A) and C)
F) C) and D)

Question 8

The only way to rationalize an upward slope for the short-run aggregate-supply curve is to argue that wages are sticky in the short run.

Accepted Answer

A) True 
 B)False

Question 9

An increase in the money supply causes output to rise in the long run.

Accepted Answer

A) True 
 B)False

Question 10

When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production?

Accepted Answer

A)   both menu costs and mistaking a price level change for a change in relative prices
B)   menu costs but not mistaking a price level change for a change in relative prices
C)   mistaking a price level change for a change in relative price but not menu costs
D)   neither menu costs nor mistaking a price level change for a change in relative pricesE) B) and D)
F) All of the above

Question 11

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

Question 12

Policymakers who influence aggregate demand can potentially mitigate the severity of economic fluctuations.

Accepted Answer

A) True 
 B)False

Question 13

Figure 33-10. 
-Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

Accepted Answer

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

Question 14

A change in the expected price level is likely to cause which of the following?

Accepted Answer

A)   a shift in the short-run aggregate supply curve and long-run aggregate supply curve
B)   a shift in the short run aggregate supply curve
C)   a shift in the aggregate demand curve
D)   a shift in the long-run aggregate supply curveE) B) and D)
F) None of the above

Question 15

The aggregate-demand curve shows the

Accepted Answer

A)   quantity of labor and other inputs that firms want to buy at each price level.
B)   quantity of labor and other inputs that firms want to buy at each inflation rate.
C)   quantity of domestically produced goods and services that households want to buy at each price level.
D)   quantity of domestically produced goods and services that households, firms, the government, and customers abroad want to buy at each price level.E) A) and D)
F) A) and B)

Question 16

Consider the exhibit below for the following questions.
Figure 33-4 
-Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

Accepted Answer

A)   to A in the long run.
B)   to C in the long run.
C)   back to A in the long run.
D)   to D in the long run.E) B) and C)
F) A) and D)

Question 17

When output rises, unemployment falls.

Accepted Answer

A) True 
 B)False

Question 18

Figure 33-6. 
-Refer to Figure 33-6. Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Accepted Answer

A)   LRAS1
B)   LRAS2
C)   LRAS3
D)   Both LRAS1 and LRAS3E) A) and B)
F) B) and D)

Question 19

The quantity of money has no real impact on things people really care about like whether or not they have a job. Most economists would agree that this statement is appropriate concerning

Accepted Answer

A)   both the short run and the long run.
B)   the short run, but not the long run.
C)   the long run, but not the short run.
D)   neither the long run nor the short run.E) B) and D)
F) None of the above

Question 20

A change in the money supply changes only nominal variables in the long run.

Accepted Answer

A) True 
 B)False

Exam 33: Aggregate Demand and Aggregate Supply

Figure 33-10. -Refer to Figure 33-10. If the economy starts at point C, stagflation would be consistent with point

Correct AnswerverifiedShow Answer

A change in the money supply changes only nominal variables in the long run.

Correct AnswerverifiedShow Answer

An increase in the money supply causes output to rise in the long run.

Correct AnswerverifiedShow Answer

Other things the same, a decrease in the price level motivates people to hold

Correct AnswerverifiedShow Answer

When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production?

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve shifts left if

Correct AnswerverifiedShow Answer

When the dollar depreciates, U.S.

Correct AnswerverifiedShow Answer

The only way to rationalize an upward slope for the short-run aggregate-supply curve is to argue that wages are sticky in the short run.

Correct AnswerverifiedShow Answer

Figure 33-5. -Refer to Figure 33-5. Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience

Correct AnswerverifiedShow Answer

Consider the exhibit below for the following questions. Figure 33-4 -Refer to Figure 33-4. If the economy starts at A, a decrease in the money supply moves the economy

Correct AnswerverifiedShow Answer

When output rises, unemployment falls.

Correct AnswerverifiedShow Answer

Figure 33-6. -Refer to Figure 33-6. Which of the long-run aggregate-supply curves is consistent with a short-run economic expansion?

Correct AnswerverifiedShow Answer

In the early 1930s in the United States, there was a

Correct AnswerverifiedShow Answer

The aggregate-demand curve shows the

Correct AnswerverifiedShow Answer

Which of the following adjust to bring aggregate supply and demand into balance?

Correct AnswerverifiedShow Answer

A change in the expected price level is likely to cause which of the following?

Correct AnswerverifiedShow Answer

Wages tend to be sticky

Correct AnswerverifiedShow Answer

Figure 33-15. -Refer to Figure 33-15. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Correct Answerverifiedconsumption, investm...View AnswerShow Answer

Policymakers who influence aggregate demand can potentially mitigate the severity of economic fluctuations.

Correct AnswerverifiedShow Answer

The quantity of money has no real impact on things people really care about like whether or not they have a job. Most economists would agree that this statement is appropriate concerning

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
consumption, investm...
View Answer

Correct Answer
verified

Correct Answer
verified