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5 Written questions

5 Matching questions

  1. 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
  2. Which of the following will not shift the aggregate demand curve to the right?
    a. a fall in the price level
    b. a decrease in taxes
    c. households expecting higher future income
    d. exports rising
  3. What is a supply shock?
  4. Which of the following factors does not cause the aggregate demand curve to shift?
    a. a change in the price level
    b. a change in government policies
    c. a change in the expectations of households and firms
    d. a change in foreign variables
  5. Describe fiscal policy.
  1. a a. a change in the price level
  2. b involves changes in federal taxes and purchases that are intended to achieve macroeconomic policy
    objectives
  3. c an
    unexpected event that causes the short-run aggregate supply curve to shift
  4. d a. a fall in the price level
  5. e c. a technological change

5 Multiple choice questions

  1. 1. changes in government policies
    2. changes in expectations of households
    3. changes in foreign variables
  2. B) decreases; decreases
  3. B) GDP = potential GDP
  4. a combination
    of inflation and recession, usually resulting from a supply shock
  5. a. the eventual agreement by workers to accept lower wages

5 True/False questions

  1. Why does the failure of workers and firms to accurately predict the price level result in an upwardsloping
    aggregate supply curve?
    a. because contracts make some wages and prices "sticky"
    b. because firms are often slow to adjust wages
    c. because menu costs make some prices "sticky"
    d. all of the above
    d. all of the above

          

  2. 7. Higher personal income taxes
    A) increase aggregate demand.
    B) increase disposable income.
    C) decrease aggregate demand.
    D) both b and c.
    C) decrease aggregate demand.

          

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

          

  4. If workers and firms across the economy adjust to the fact that the price level is higher than they had
    expected it to be,
    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.
    c. the short-run aggregate supply curve will shift to the left

          

  5. 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
    c. the short-run aggregate supply curve will shift to the left.