Question 1

When the price level falls

Accepted Answer

A)   households want to lend less.
B)   the interest rate rises.
C)   firms want to spend less on investment goods.
D)   None of the above are correct.E) A) and B)
F) A) and C) D

Question 2

Stagflation results from continued decreases in aggregate demand.

Accepted Answer

A) True 
 B)False

Question 3

When the money supply decreases

Accepted Answer

A)   interest rates fall and so aggregate demand shifts right.
B)   interest rates fall and so aggregate demand shifts left.
C)   interest rates rise and so aggregate demand shifts right.
D)   interest rates rise and so aggregate demand shifts left.E) All of the above
F) A) and C)

Question 4

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) A) and C)
F) B) and C)

Question 5

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) C) and D)
F) B) and D)

Question 6

If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,

Accepted Answer

A)   the dollar would appreciate which would cause aggregate demand to shift right.
B)   the dollar would appreciate which would cause aggregate demand to shift left.
C)   the dollar would depreciate which would cause aggregate demand to shift right.
D)   the dollar would depreciate which would cause aggregate demand to shift left.E) A) and B)
F) A) and C)

Question 7

Consider the exhibit below for the following questions.
Figure 33-1 
-Refer to Figure 33-1.In the short run,a favorable shift in aggregate supply would move the economy from

Accepted Answer

A)   A to B.
B)   B to C.
C)   C to D.
D)   D to A.E) All of the above
F) A) and B)

Question 8

Make a list of things that would shift the aggregate demand curve to the right.

Accepted Answer

Examples (and variations on examples)in ...

Question 9

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...

Question 10

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) A) and C)
F) A) and B)

Question 11

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

Question 12

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected,then some firms believe that the relative price of what they produce has

Accepted Answer

A)   decreased,so they increase production.
B)   decreased,so they decrease production.
C)   increased,so they increase production.
D)   increased,so they decrease production.E) C) and D)
F) B) and D)

Question 13

Consider the exhibit below for the following questions.
Figure 33-1 
-Refer to Figure 33-1.The economy would be moving to long-run equilibrium if it started at

Accepted Answer

A)   A and moved to B.
B)   C and moved to B.
C)   D and moved to C.
D)   None of the above is correct.E) B) and D)
F) B) and C)

Question 14

What do most economists believe concerning the relation between the price level and real output?

Accepted Answer

Most economists believe that in the long...

Question 15

Optimism
Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time.
-Refer to Optimism.In the long run,the change in price expectations created by optimism shifts

Accepted Answer

A)   long-run aggregate supply right.
B)   long-run aggregate supply left.
C)   short-run aggregate supply right.
D)   short-run aggregate supply left.E) A) and D)
F) B) and D)

Question 16

The aggregate supply curve is upward sloping in

Accepted Answer

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

Question 17

Consider the exhibit below for the following questions.
Figure 33-1 
-Refer to Figure 33-1.If the economy starts at C,an increase in the money supply moves the economy

Accepted Answer

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

Question 18

When the dollar depreciates,each dollar buys

Accepted Answer

A)   more foreign currency,and so buys more foreign goods.
B)   more foreign currency,and so buys fewer foreign goods.
C)   less foreign currency,and so buys more foreign goods.
D)   less foreign currency,and so buys fewer foreign goods.E) A) and B)
F) A) and C)

Question 19

The effects of a higher than expected price level are shown by

Accepted Answer

A)   shifting the short-run aggregate supply curve right.
B)   shifting the short-run aggregate supply curve left.
C)   moving to the right along a given aggregate supply curve.
D)   moving to the left along a given aggregate supply curve.E) B) and C)
F) A) and D)

Question 20

A decrease in the price level makes consumers feel wealthier,so they purchase more.This logic helps explain why the aggregate demand curve slopes downward.

Accepted Answer

A) True 
 B)False

Exam 33: Aggregate Demand and Aggregate Supply

When the price level falls

Correct Answer
verified
D

Stagflation results from continued decreases in aggregate demand.

Correct Answer
verified

When the money supply decreases

Correct Answer
verified

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 Answer
verified

The aggregate-demand curve shows the

Correct Answer
verified

If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,

Correct Answer
verified

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.In the short run,a favorable shift in aggregate supply would move the economy from

Correct Answer
verified

Make a list of things that would shift the aggregate demand curve to the right.

Correct Answer
verified
Examples (and variations on examples)in ...
View Answer

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

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

Correct Answer
verified

The long-run aggregate supply curve shifts left if

Correct Answer
verified
B

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected,then some firms believe that the relative price of what they produce has

Correct Answer
verified

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.The economy would be moving to long-run equilibrium if it started at

Correct Answer
verified

What do most economists believe concerning the relation between the price level and real output?

Correct Answer
verified
Most economists believe that in the long...
View Answer

Correct Answer
verified

The aggregate supply curve is upward sloping in

Correct Answer
verified
D

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.If the economy starts at C,an increase in the money supply moves the economy

Correct Answer
verified

When the dollar depreciates,each dollar buys

Correct Answer
verified

The effects of a higher than expected price level are shown by

Correct Answer
verified

A decrease in the price level makes consumers feel wealthier,so they purchase more.This logic helps explain why the aggregate demand curve slopes downward.

Correct Answer
verified

Exam 33: Aggregate Demand and Aggregate Supply

When the price level falls

Correct AnswerverifiedD

Stagflation results from continued decreases in aggregate demand.

Correct AnswerverifiedShow Answer

When the money supply decreases

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 aggregate-demand curve shows the

Correct AnswerverifiedShow Answer

If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,

Correct AnswerverifiedShow Answer

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.In the short run,a favorable shift in aggregate supply would move the economy from

Correct AnswerverifiedShow Answer

Make a list of things that would shift the aggregate demand curve to the right.

Correct AnswerverifiedExamples (and variations on examples)in ...View AnswerShow 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

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

Correct AnswerverifiedShow Answer

The long-run aggregate supply curve shifts left if

Correct AnswerverifiedB

The misperceptions theory of the short-run aggregate supply curve says that if the price level is higher than people expected,then some firms believe that the relative price of what they produce has

Correct AnswerverifiedShow Answer

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.The economy would be moving to long-run equilibrium if it started at

Correct AnswerverifiedShow Answer

What do most economists believe concerning the relation between the price level and real output?

Correct AnswerverifiedMost economists believe that in the long...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The aggregate supply curve is upward sloping in

Correct AnswerverifiedD

Consider the exhibit below for the following questions. Figure 33-1 -Refer to Figure 33-1.If the economy starts at C,an increase in the money supply moves the economy

Correct AnswerverifiedShow Answer

When the dollar depreciates,each dollar buys

Correct AnswerverifiedShow Answer

The effects of a higher than expected price level are shown by

Correct AnswerverifiedShow Answer

A decrease in the price level makes consumers feel wealthier,so they purchase more.This logic helps explain why the aggregate demand curve slopes downward.

Correct AnswerverifiedShow Answer

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Examples (and variations on examples)in ...
View Answer

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

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Most economists believe that in the long...
View Answer

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified