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5 Written questions

5 Matching questions

  1. Which of the following statements is correct?
    a. If households become more optimistic about their future incomes, the aggregate demand curve
    will shift to the right.
    b. If firms become more optimistic about the future profitability of investment spending, the
    aggregate demand curve will shift to the right.
    c. Both a. and b.
    d. Neither a. nor b. Optimism or pessimism do not have anything to do with shifts in the aggregate
    demand curve
  2. The long-run aggregate supply curve
    a. is positively sloped.
    b. shifts to the right as technological change occurs.
    c. is negatively sloped.
    d. shifts to the left as the capital stock of the country grows.
  3. If oil prices rise unexpectedly,
    a. there will be a movement up and to the right along a stationary aggregate supply curve.
    b. there will be a movement down and to the left along a stationary aggregate supply curve.
    c. the short-run aggregate supply curve will shift to the left.
    d. the short-run aggregate supply curve will shift to the right
  4. Which of the following will cause the short-run aggregate supply curve to shift to the right?
    a. a higher expected future price level
    b. an increase in the actual (or current) price level
    c. a technological change
    d. all of the above
  5. What is the impact of an increase in the price level on the short-run aggregate supply curve?
    a. a shift of the curve to the right
    b. a shift of the curve to the left
    c. a movement up and to the right along a stationary curve
    d. a combination of a movement along the curve and a shift of the curve
  1. a c. the short-run aggregate supply curve will shift to the left.
  2. b c. a technological change
  3. c c. Both a. and b.
  4. d c. a movement up and to the right along a stationary curve
  5. e b. shifts to the right as technological change occurs.

5 Multiple choice questions

  1. involves the
    actions the Federal Reserve takes to manage the money supply and interest rates to pursue
    macroeconomic policy objectives
  2. b. a decrease in exports and an increase in imports
  3. C) a negative supply shock
  4. d. the same as the long-run aggregate supply curve.
  5. a combination
    of inflation and recession, usually resulting from a supply shock

5 True/False questions

  1. If real GDP in the United States increases faster than real GDP in other countries, U.S. imports will
    __________ faster than U.S. exports, and net exports will ___________.
    a. increase; rise
    b. increase; fall
    c. decrease; rise
    d. decrease; fall
    b. increase; fall

          

  2. If firms reduce investment spending and the economy slumps into a recession, which of the following
    contributes to the adjustment that causes the economy to return to its long-run equilibrium?
    a. the eventual agreement by workers to accept lower wages
    b. the decision by firms to charge higher prices
    c. both of the above
    d. none of the above
    a. the eventual agreement by workers to accept lower wages

          

  3. Describe the aggregate demand curve.shows the relationship between the price level and the quantity of real GDP
    demanded by households, firms, and the government

          

  4. Describe the interest rate effect.A higher price level will tend to increase interest rates. Higher
    interest rates will reduce investment spending by firms as borrowing costs rise. Additionally,
    higher interest rates will also reduce consumption spending.

          

  5. The wealth effect refers to the fact that
    a. when the price level falls, the real value of household wealth rises, and so will consumption.
    b. when income rises, consumption rises.
    c. when the price level falls, the nominal value of assets rises, while the real value of assets remains
    the same.
    d. all of the above
    a. when the price level falls, the real value of household wealth rises, and so will consumption.

          

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