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5 Written questions

5 Matching questions

  1. . Why does the short run aggregate supply curve shift to the right in the long run, following a decrease in
    aggregate demand?
    A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages
    and prices.
    B) Workers and firms adjust their expectations of wages and prices downward and they push for higher
    wages and prices.
    C) Workers and firms adjust their expectations of wages and prices upward and they accept lower wages and
    prices.
    D) Workers and firms adjust their expectations of wages and prices upward and they push for higher wages
    and prices
  2. If the exchange rate between the dollar and foreign currencies rises (the dollar rises in value versus
    foreign currencies), the price in foreign currency of U.S. products will _________ and the U.S.
    aggregate demand curve will shift to the _________.
    a. rise; right
    b. rise; left
    c. fall; right
    d. fall; left
  3. 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
  4. Describe the long-run aggregate supply curve.
  5. 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.
  1. a b. increase; fall
  2. b 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
  3. c A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages
    and prices
  4. d c. the short-run aggregate supply curve will shift to the left
  5. e b. rise; left

5 Multiple choice questions

  1. government purchases
  2. d. all of the above
  3. b. a decrease in exports and an increase in imports
  4. c. the short-run aggregate supply curve will shift to the left.
  5. a. the eventual agreement by workers to accept lower wages

5 True/False questions

  1. Why is the aggregate demand curve downward sloping?shows the relationship between the price level and the level of planned
    aggregate expenditure by households, firms, and the government

          

  2. 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. all of the above

          

  3. . Which of the following is considered a negative supply shock?
    A) increasing investment in the economy causes the capital stock to rise
    B) an improvement in technology
    C) a decline in wages
    D) an unexpected increase in the price of natural gas
    c. a technological change

          

  4. Which of the following government policies affects the economy through intended changes in the
    money supply and interest rates?
    a. fiscal policy
    b. monetary policy
    c. both fiscal and monetary policies
    d. neither fiscal nor monetary policies
    b. monetary policy

          

  5. 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
    d. all of the above