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5 Written questions

5 Matching questions

  1. Describe the long-run aggregate supply curve.
  2. An increase in net exports that results from a change in the price level in the United States
    a. will shift the aggregate demand curve to the right.
    b. will shift the aggregate demand curve to the left.
    c. will not cause the aggregate demand curve to shift.
    d. will have an indeterminate effect on aggregate demand.
  3. 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.
  4. Describe the short-run aggregate supply curve.
  5. Describe the wealth effect.
  1. a 1. shows the relationship in the short run between the price level and the quantity of real GDP supplied by
    firms
    2. slopes upward
    because workers and firms fail to predict accurately the future price level
  2. b As the price level increases, the real value of household wealth falls, and
    so will consumption. In contrast, if the price level declines, real household wealth rises and so
    does consumption.
  3. c c. will not cause the aggregate demand curve to shift
  4. d b. shifts to the right as technological change occurs.
  5. e 1.shows the relationship in the long run between the price level and the quantity of real GDP supplied
    2. a vertical line because in the long run, real GDP is always at its
    potential level and is unaffected by the price level

5 Multiple choice questions

  1. c. the short-run aggregate supply curve will shift to the left
  2. shows the relationship between the price level and the level of planned
    aggregate expenditure by households, firms, and the government
  3. shows the relationship between the price level and the quantity of real GDP
    demanded by households, firms, and the government
  4. b. not change real GDP in the long-run.
  5. d. the labor force increases

5 True/False questions

  1. 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
    d. the same as the long-run aggregate supply curve.

          

  2. If the price level increases, then
    a. the economy will move up and to the left along a stationary aggregate demand curve.
    b. the aggregate demand curve will shift to the right.
    c. the aggregate demand curve will shift to the left.
    d. none of the above
    a. the economy will move up and to the left along a stationary aggregate demand curve.

          

  3. Which of the following factors will cause the long-run aggregate supply curve to shift to the right?
    a. an increase in the number of workers in the economy
    b. the accumulation of more machinery and equipment
    c. technological change
    d. all of the above
    d. the labor force increases

          

  4. Describe fiscal policy.involves changes in federal taxes and purchases that are intended to achieve macroeconomic policy
    objectives

          

  5. Assume that steel is the only good produced in the economy. Which of the following would explain
    why the short-run aggregate supply curve for steel would be upward sloping?
    a. Steel demand and steel prices begin to rise rapidly, and the wages of steel workers rise as the
    demand for workers increases.
    b. Steel demand and steel prices begin to rise rapidly, but the price of coal—an input into the
    production of steel—remains fixed by contract.
    c. Steel demand and steel prices begin to rise rapidly, but foreign producers increase production
    faster than domestic producers increase production.
    d. all of the above
    consumption
    (C), investment (I), government purchases (G), and net exports (NX)

          

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