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The following aggregate demand and supply schedules are for a hypothetical economy: The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data. The change in aggregate demand indicated in the previous question might have been caused by: A) an increase in net exports. B) a worsening of business expectations. C) an increase in consumer wealth. D) a decrease in the personal income tax. -Refer to the above data. The change in aggregate demand indicated in the previous question might have been caused by:


A) an increase in net exports.
B) a worsening of business expectations.
C) an increase in consumer wealth.
D) a decrease in the personal income tax.

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

Correct Answer

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The following aggregate demand and supply schedules are for a hypothetical economy: The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data. If the price level is 150 and producers supply $300 of real output: A) a shortage of real output of $200 will occur. B) a shortage of real output of $100 will occur. C) a surplus of real output of $300 will occur. D) neither a shortage nor a surplus of real output will occur. -Refer to the above data. If the price level is 150 and producers supply $300 of real output:


A) a shortage of real output of $200 will occur.
B) a shortage of real output of $100 will occur.
C) a surplus of real output of $300 will occur.
D) neither a shortage nor a surplus of real output will occur.

E) None of the above
F) A) and C)

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The interest rate effect indicates that a(n) :


A) decrease in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
B) decrease in the price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending.
C) increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending.
D) increase in the supply of money will increase interest rates and decrease interest-sensitive consumption and investment spending.

E) B) and C)
F) None of the above

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Which of the following explains why the aggregate demand schedule is downward sloping?


A) the real-balances effect
B) the interest rate effect
C) the foreign trade effect
D) all of the above

E) B) and D)
F) None of the above

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Shifts in the aggregate supply curve are caused by changes in:


A) consumption spending.
B) the quantity of real output demanded.
C) the quantity of real output supplied.
D) one or more of the determinants of aggregate supply.

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

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-Which of the above diagrams best portrays the effects of an increase in foreign spending on our products? A) A B) B C) C D) D -Which of the above diagrams best portrays the effects of an increase in foreign spending on our products?


A) A
B) B
C) C
D) D

E) B) and D)
F) None of the above

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The factors which affect the amounts that consumers, businesses, government, and foreigners wish to purchase at each price level are the:


A) wealth, interest rate, and foreign trade effects.
B) determinants of aggregate supply.
C) determinants of aggregate demand.
D) sole determinants of the equilibrium price level and the equilibrium real output.

E) A) and D)
F) None of the above

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An increase in net exports can be expected to shift the:


A) aggregate expenditures curve upward and the aggregate demand curve rightward.
B) aggregate expenditures curve upward and the aggregate demand curve leftward.
C) aggregate expenditures curve downward and the aggregate demand curve rightward.
D) aggregate expenditures curve downward and the aggregate demand curve leftward.

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

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The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy: The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy: -Refer to the above information, the level of productivity is: A) 2. B) .5. C) 4. D) 200. -Refer to the above information, the level of productivity is:


A) 2.
B) .5.
C) 4.
D) 200.

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

Correct Answer

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The real-balances, interest rate, and foreign trade effects all help explain:


A) why the aggregate demand curve is downward sloping.
B) why the aggregate supply curve is upward sloping.
C) shifts in the aggregate demand curve.
D) shifts in the aggregate supply curve.

E) All of the above
F) A) and D)

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Suppose that the price of each input increased from $5 to $8. The per unit cost of production in the above economy would:


A) rise by $1.50 and the aggregate supply curve would shift to the right.
B) rise by 60 percent and the aggregate supply curve would shift to the left.
C) rise by 60 percent and the aggregate demand curve would shift to the left.
D) fall by $1.50 and the aggregate demand curve would shift to the right.

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

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In order to study the macroeconomics we must combine the prices and quantities generated in single-product markets into broad aggregates.

A) True
B) False

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Suppose higher taxes on businesses cause a decrease in spending on plant and equipment. How will this affect the aggregate expenditure (AE) and the aggregate demand (AD) schedules?


A) AE shifts up; AD shifts to the left
B) AE shifts down; AD shifts to the left
C) AE shifts up; AD shifts to the right
D) AE shifts down; AD shifts to the right

E) All of the above
F) A) and B)

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If the price of each input is $5, the per unit cost of production in the above economy is:


A) $5.
B) $2.75.
C) $2.50.
D) $.40.

E) None of the above
F) C) and D)

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Which effect best explains the downward slope of the aggregate demand curve?


A) a multiplier effect
B) an income effect
C) a substitution effect
D) a real-balances effect

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

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The following table is for a particular country in which C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures are in billions of dollars. Each question is independent of the other questions. The following table is for a particular country in which C is consumption expenditures, I<sub>g</sub> is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures are in billions of dollars. Each question is independent of the other questions. -Refer to the above table. If the aggregate supply schedule intersects the aggregate demand at price level 119 in this country, its equilibrium level of real GDP will be: A) $37 billion. B) $35 billion. C) $26 billion. D) $43 billion. -Refer to the above table. If the aggregate supply schedule intersects the aggregate demand at price level 119 in this country, its equilibrium level of real GDP will be:


A) $37 billion.
B) $35 billion.
C) $26 billion.
D) $43 billion.

E) B) and C)
F) All of the above

Correct Answer

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-Refer to the above diagram. If the aggregate supply curve shifted from AS<sub>0</sub> to AS<sub>1</sub>, we could say that: A) aggregate supply has increased, equilibrium output has decreased, and the price level has increased. B) aggregate supply has decreased, equilibrium output has decreased, and the price level has increased. C) an increase in the amount of output supplied has occurred. D) aggregate supply has increased and the price level has risen to G. -Refer to the above diagram. If the aggregate supply curve shifted from AS0 to AS1, we could say that:


A) aggregate supply has increased, equilibrium output has decreased, and the price level has increased.
B) aggregate supply has decreased, equilibrium output has decreased, and the price level has increased.
C) an increase in the amount of output supplied has occurred.
D) aggregate supply has increased and the price level has risen to G.

E) None of the above
F) A) and D)

Correct Answer

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An increase in productivity will shift the aggregate:


A) demand curve leftward.
B) demand curve rightward.
C) supply curve rightward.
D) supply curve leftward.

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

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Cost-push inflation is characterized by a(n) :


A) increase in aggregate supply and a decrease in aggregate demand.
B) increase in aggregate demand and no change in aggregate supply.
C) decrease in aggregate supply and no change in aggregate demand.
D) decrease in both aggregate supply and aggregate demand.

E) A) and C)
F) A) and D)

Correct Answer

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Other things being equal, if world oil prices increased by 70 percent then the most likely effect would be to:


A) shift the aggregate demand curve right.
B) shift the aggregate supply curve right.
C) shift the aggregate supply curve left.
D) shift the aggregate demand curve right and the aggregate supply curve left.

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

Correct Answer

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Showing 121 - 140 of 195

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