Filters
Question type
Study Flashcards

The relationship between the price level and the real Gross Domestic Product (GDP) without full adjustment or full information is represented by


A) the long-run aggregate supply curve.
B) the short-run aggregate supply curve.
C) the aggregate demand curve.
D) the distance between the long-run aggregate supply curve and the short-run aggregate supply curve.

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

Correct Answer

verifed

verified

-Refer to the above figure. Suppose the original long-run equilibrium was at point B. What could have caused the move to the current equilibrium? A) Decreases in the price level caused short-run aggregate supply to fall. B) Input prices must have increased, causing long-run aggregate supply to increase. C) Aggregate demand must have decreased. D) A temporary reduction in production due to bad weather. -Refer to the above figure. Suppose the original long-run equilibrium was at point B. What could have caused the move to the current equilibrium?


A) Decreases in the price level caused short-run aggregate supply to fall.
B) Input prices must have increased, causing long-run aggregate supply to increase.
C) Aggregate demand must have decreased.
D) A temporary reduction in production due to bad weather.

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

Correct Answer

verifed

verified

The short-run aggregate supply curve in modern Keynesian analysis represents the relationship between


A) the real output of goods and services in the economy and the price level.
B) the real output of goods and services in the economy and the price level when people have fully adjusted their behavior.
C) the real output of goods and services in the economy and the price level when people have not fully adjusted their behavior.
D) the nominal output of goods and services and the real output of goods and services.

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

Correct Answer

verifed

verified

A stronger U.S. dollar in world exchange markets means that


A) a dollar buys more units of foreign currency than it could before.
B) a dollar buys less units of foreign currency than it could before.
C) a dollar buys the same amount of foreign currency than it could before, with gold backing up the value of the dollar.
D) foreigners sell the dollars that they have.

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

Correct Answer

verifed

verified

-Identify the 3 curves in the above figure. A) (1) is long-run aggregate supply, (2) is short-run aggregate supply, (3) is aggregate demand. B) (1) is aggregate demand, (2) is short-run aggregate supply, (3) is long-run aggregate supply. C) (1) is short-run aggregate supply, (2) is long-run aggregate supply, (3) is aggregate demand. D) (1) is long-run aggregate supply, (2) is aggregate demand, (3) is short-run aggregate supply. -Identify the 3 curves in the above figure.


A) (1) is long-run aggregate supply, (2) is short-run aggregate supply, (3) is aggregate demand.
B) (1) is aggregate demand, (2) is short-run aggregate supply, (3) is long-run aggregate supply.
C) (1) is short-run aggregate supply, (2) is long-run aggregate supply, (3) is aggregate demand.
D) (1) is long-run aggregate supply, (2) is aggregate demand, (3) is short-run aggregate supply.

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

Correct Answer

verifed

verified

Suppose aggregate demand is increasing over time. Would the modern Keynesian model assume that the price level would always be constant? Explain.

Correct Answer

verifed

verified

No. Eventually full employment would be ...

View Answer

The gap that exists when equilibrium real GDP is less than full-employment real GDP is


A) the short-run aggregate supply curve.
B) money illusion.
C) a recessionary gap.
D) an inflationary gap.

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

Correct Answer

verifed

verified

-In the above figure, what are the long-run equilibrium price level and real GDP? A) 130 and $12 trillion B) 130 and $11.5 trillion C) 120 and $11.5 trillion D) 120 and $12 trillion -In the above figure, what are the long-run equilibrium price level and real GDP?


A) 130 and $12 trillion
B) 130 and $11.5 trillion
C) 120 and $11.5 trillion
D) 120 and $12 trillion

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

Correct Answer

verifed

verified

According to modern Keynesian analysis, an increase in aggregate demand leads to a higher price level because the


A) aggregate demand curve is upward sloping.
B) short-run aggregate supply curve is upward sloping.
C) aggregate demand curve is upward horizontal.
D) short-run aggregate supply curve is vertical.

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

Correct Answer

verifed

verified

Other things being equal, if input prices rise in a country, then there would be


A) cost-push inflation.
B) demand-pull inflation.
C) cost-push deflation.
D) more production and a lower price level.

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

Correct Answer

verifed

verified

The net effect of a stronger dollar on real GDP is


A) an increase in real GDP.
B) a decrease in real GDP.
C) an increase in the price level.
D) dependent on whether the increase in aggregate supply is more or less than the decrease in aggregate demand.

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

Correct Answer

verifed

verified

Assume equilibrium real GDP per year is equal to full-employment real GDP. Which of the following will cause a recessionary gap?


A) an increase in aggregate demand
B) a reduction in aggregate demand
C) a discovery of a new raw material
D) a temporary reduction in the price of oil

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

Correct Answer

verifed

verified

According to the classical model, desired saving is


A) a function of real GDP.
B) equal to desired investment.
C) identical to the demand for saving at each level of real GDP.
D) affected by the money illusion at low income levels.

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

Correct Answer

verifed

verified

-Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and E is the current short-run aggregate supply (SRAS) curve. If a 90-day embargo of oil from the Middle East to the United States were announced, and if after that 90-day period oil prices were expected to return to normal pre-embargo prices, then you would expect A) the LRAS and the SRAS to remain at B and E, respectively. B) the LRAS to remain at B, but the SRAS to shift to D. C) the LRAS to remain at B, but the SRAS to shift to F. D) the LRAS to shift to C, and the SRAS to shift to F. -Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and E is the current short-run aggregate supply (SRAS) curve. If a 90-day embargo of oil from the Middle East to the United States were announced, and if after that 90-day period oil prices were expected to return to normal pre-embargo prices, then you would expect


A) the LRAS and the SRAS to remain at B and E, respectively.
B) the LRAS to remain at B, but the SRAS to shift to D.
C) the LRAS to remain at B, but the SRAS to shift to F.
D) the LRAS to shift to C, and the SRAS to shift to F.

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

Correct Answer

verifed

verified

A key component of the Keynesian model is that


A) prices are sticky.
B) prices are flexible.
C) wages are flexible.
D) people are not fooled by money illusion.

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

Correct Answer

verifed

verified

In the classical model, an increase in aggregate demand will cause


A) an increase in actual output, or Gross Domestic Product (GDP) .
B) a decrease in actual output, or Gross Domestic Product (GDP) .
C) an increase in price level.
D) a decrease in price level.

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

Correct Answer

verifed

verified

Which of the following is NOT an assumption of the classical model?


A) Wages and prices are fixed.
B) People are motivated by the own self-interest.
C) Pure competition exists.
D) Buyers react to changes in relative prices.

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

Correct Answer

verifed

verified

The horizontal portion of the short-run aggregate supply curve in which there is excessive unemployment and unused capacity in the economy is


A) Say's law.
B) the classical short-run aggregate supply curve.
C) the Keynesian short-run aggregate supply curve.
D) exists when prices are flexible.

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

Correct Answer

verifed

verified

-Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and that E is the current short-run aggregate supply (SRAS) curve. If a new discovery of large oil fields in Florida led to an increase in the nation's productive capacities, then we could expect the LRAS curve and the SRAS curve to A) remain B and E. B) move to A and D. C) move to C and F. D) move to A and F. -Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and that E is the current short-run aggregate supply (SRAS) curve. If a new discovery of large oil fields in Florida led to an increase in the nation's productive capacities, then we could expect the LRAS curve and the SRAS curve to


A) remain B and E.
B) move to A and D.
C) move to C and F.
D) move to A and F.

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

Correct Answer

verifed

verified

A short-run equilibrium occurs


A) at the intersection of the long-run aggregate supply curve and the aggregate demand curve.
B) at the intersection of the short-run aggregate supply curve and the long-run aggregate supply curve.
C) at the intersection of the short-run aggregate supply curve and the aggregate demand curve.
D) at the real GDP associated with full employment.

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

Correct Answer

verifed

verified

Showing 241 - 260 of 365

Related Exams

Exam 1

The Nature of Economics

347 Questions

Exam 2

Scarcity and the World of Trade-Offs

412 Questions

Exam 3

Demand and Supply

448 Questions

Exam 4

Extensions of Demand and Supply Analysis

399 Questions

Exam 5

Public Spending and Public Choice

359 Questions

Exam 6

Funding the Public Sector

202 Questions

Exam 7

The Macroeconomy: Unemployment, Inflation, and Deflation

412 Questions

Exam 8

Measuring the Economys Performance

413 Questions

Exam 9

Global Economic Growth and Development

282 Questions

Exam 10

Real GDP and the Price Level in the Long Run

290 Questions

Exam 12

Consumption, Real GDP, and the Multiplier

445 Questions

Exam 13

Fiscal Policy

273 Questions

Exam 14

Deficit Spending and the Public Debt

145 Questions

Exam 15

Money, Banking, and Central Banking

517 Questions

Exam 16

Domestic and International Dimensions of Monetary Policy

357 Questions

Exam 17

Stabilization in an Integrated World Economy

306 Questions

Exam 18

Policies and Prospects for Global Economic Growth

216 Questions

Exam 19

Demand and Supply Elasticity

413 Questions

Exam 20

Consumer Choice

458 Questions

Exam 21

Rents, Profits, and the Financial Environment of Business

445 Questions

Exam 22

The Firm: Cost and Output Determination

387 Questions

Exam 23

Perfect Competition

431 Questions

Exam 24

Monopoly

386 Questions

Exam 25

Monopolistic Competition

309 Questions

Exam 26

Oligopoly and Strategic Behavior

306 Questions

Exam 27

Regulation and Antitrust Policy in a Globalized Economy

309 Questions

Exam 28

The Labor Market: Demand, Supply and Outsourcing

376 Questions

Exam 29

Unions and Labor Market Monopoly Power

318 Questions

Exam 30

Income, Poverty, and Health Care

302 Questions

Exam 31

Environmental Economics

300 Questions

Exam 32

Comparative Advantage and the Open Economy

314 Questions

Exam 33

Exchange Rates and the Balance of Payments

300 Questions

Show Answer