64. When the dollar depreciates, U.S.
a.
net exports rise, which increases the aggregate quantity of goods and services demanded.
b.
net exports rise, which decreases the aggregate quantity of goods and services demanded.
c.
net exports fall, which increases the aggregate quantity of goods and services demanded.
d.
net exports fall, which decreases the aggregate quantity of goods and services demanded.
65. When the dollar depreciates, U.S.
a.
exports and imports increase.
b.
exports increase, while imports decrease.
c.
exports decrease, while imports increase.
d.
exports and imports decrease.
66. When the dollar appreciates, U.S.
a.
net exports rise, which increases the aggregate quantity of goods and services demanded.
b.
net exports rise, which decreases the aggregate quantity of goods and services demanded.
c.
net exports fall, which increases the aggregate quantity of goods and services demanded.
d.
net exports fall, which decreases the aggregate quantity of goods and services demanded.
67. When the dollar appreciates, U.S.
a.
exports decrease, while imports increase.
b.
exports and imports decrease.
c.
exports and imports increase.
d.
exports increase, while imports decrease.
68. As the price level rises,
a.
b.
c.
d.
69. As the price level falls,
a.
b.
c.
d.
70. A decrease in U.S. interest rates leads to
a.
a depreciation of the dollar that leads to greater net exports.
b.
a depreciation of the dollar that leads to smaller net exports.
c.
an appreciation of the dollar that leads to greater net exports.
d.
an appreciation of the dollar that leads to smaller net exports.
71. Other things the same, a decrease in the price level causes the interest rate to
a.
increase, the dollar to appreciate, and net exports to increase.
b.
increase, the dollar to depreciate, and net exports to decrease.
c.
decrease, the dollar to depreciate, and net exports to increase.
d.
decrease, the dollar to appreciate, and net exports to decrease.
72. Other things the same, an increase in the price level causes the interest rate to
a.
increase, the dollar to depreciate, and net exports to increase.
b.
increase, the dollar to appreciate, and net exports to decrease.
c.
decrease, the dollar to depreciate, and net exports to increase.
d.
decrease, the dollar to appreciate, and net exports to decrease.
73. Other things the same, as the price level falls, the real value of a dollar
a.
rises, and interest rates rise.
b.
rises, and interest rates fall.
c.
falls, and interest rates rise.
d.
falls, and interest rates fall.
74. Other things the same, as the price level rises, the real value of a dollar
a.
rises, and interest rates rise.
b.
rises, and interest rates fall.
c.
falls, and interest rates rise.
d.
falls, and interest rates fall.
75. Other things the same, as the price level falls, a country’s exchange rate
a.
and interest rates rise.
b.
and interest rates fall.
c.
falls and interest rates rise.
d.
rises and interest rates fall.
76. Other things the same, as the price level rises, exchange rates
a.
and interest rates rise.
b.
and interest rates fall.
c.
fall and interest rates rise.
d.
rise and interest rates fall.
77. Other things the same, as the price level rises, the real value of money
a.
and the exchange rate rise.
b.
and the exchange rate fall.
c.
rises and the exchange rate falls.
d.
falls and the exchange rate rises.
78. Other things the same, as the price level falls,
a.
the dollar depreciates.
b.
the interest rate rises.
c.
people feel less wealthy.
d.
All of the above are correct.
79. Other things the same, as the price level rises,
a.
the dollar depreciates.
b.
the interest rate falls.
c.
people feel less wealthy.
d.
All of the above are correct.
80. Other things the same, the aggregate quantity of goods demanded in the U.S. increases if
a.
real wealth falls.
b.
the interest rate rises.
c.
the dollar depreciates.
d.
None of the above is correct.
81. Other things the same, the aggregate quantity of goods demanded in the U.S. increases if
a.
real wealth rises.
b.
the interest rate rises.
c.
the dollar appreciates.
d.
All of the above are correct.
82. Other things the same, the aggregate quantity of goods demanded decreases if
a.
real wealth falls.
b.
the interest rate rises.
c.
the dollar appreciates.
d.
All of the above are correct.
83. Which of the following will both make people buy more?
a.
wealth and interest rates rise.
b.
wealth rises and interest rates fall.
c.
wealth falls and interest rates rise.
d.
wealth falls and interest rates fall.
84. Part of the explanation for why the aggregate-demand curve slopes downward is that a decrease in the price level
a.
decreases the real value of money.
b.
increases the real value of the dollar in foreign exchange markets.
c.
decreases the interest rate.
d.
All of the above are correct.
85. Which of the following does not help explain the direction the quantity of aggregate goods demanded changes when
the price level decreases?
a.
consumer wealth rises
b.
borrowing rises
c.
each dollar is worth more domestic goods
d.
the dollar appreciates relative to other currencies
86. Which of the following effects provide incentives for consumers to spend less when the price level rises?
a.
the wealth effect and the interest-rate effect
b.
the wealth effect but not the interest-rate effect
c.
the interest-rate effect but not the wealth effect
d.
neither the wealth-effect nor the interest rate effect
87. Other things the same, a decrease in the price level causes real wealth to
a.
fall, interest rates to fall, and the dollar to appreciate.
b.
fall, interest rates to rise, and the dollar to depreciate.
c.
rise, interest rates to rise, and the dollar to appreciate.
d.
rise, interest rates to fall, and the dollar to depreciate.
88. An increase in the interest rate causes investment to
a.
rise and the exchange rate to appreciate.
b.
fall and the exchange rate to depreciate.
c.
rise and the exchange rate to depreciate.
d.
fall and the exchange rate to appreciate.
89. Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire
a.
increased consumption, which shifts the aggregate-demand curve right.
b.
increased consumption, which shifts the aggregate-demand curve left.
c.
decreased consumption, which shifts the aggregate-demand curve right.
d.
decreased consumption, which shifts the aggregate-demand curve left.
90. Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to
a.
decrease consumption, shown as a movement to the left along a given aggregate-demand curve.
b.
increase consumption, shown as a movement to the right along a given aggregate-demand curve.
c.
decrease consumption, shown by shifting the aggregate-demand curve to the left.
d.
increase consumption, shown by shifting the aggregate-demand curve to the right.
91. From 2001 to 2005 there was a dramatic rise in the price of houses. If this rise made people feel wealthier, then it
would have shifted
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
92. From 2006 to 2008 there was a dramatic fall in the price of houses. If this fall made people feel less wealthy, then it
would have shifted
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
93. From 1995 to 1999 there was a dramatic rise in stock prices. If this rise made people feel wealthier, then it would have
shifted
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
94. An increase in household saving causes consumption to
a.
rise and aggregate demand to increase.
b.
rise and aggregate demand to decrease.
c.
fall and aggregate demand to increase.
d.
fall and aggregate demand to decrease.
95. When taxes decrease, consumption
a.
decreases as shown by a movement to the left along a given aggregate-demand curve.
b.
decreases as shown by a shift of the aggregate demand curve to the left.
c.
increases as shown by a movement to the right along a given aggregate-demand curve.
d.
increases as shown by a shift of the aggregate demand curve to the right.
96. When taxes increase, consumption
a.
decreases as shown by a movement to the left along a given aggregate-demand curve.
b.
decreases as shown by a shift of the aggregate demand curve to the left.
c.
increases as shown by a movement to the right along a given aggregate-demand curve.
d.
increases as shown by a shift of the aggregate demand curve to the right.
97. Which of the following both shift aggregate demand left?
a.
a decrease in taxes and at a given price level consumers feel more wealthy
b.
a decrease in taxes and at a given price level consumers feel less wealthy
c.
an increase in taxes and at a given price level consumers feel more wealthy
d.
an increase in taxes and at a given price level consumers feel less wealthy
98. Other things the same, an increase in the amount of capital firms wish to purchase would initially shift
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
99. If businesses in general decide that they have overbuilt and so now have too much capital, their response to this would
initially shift
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
100. Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital
purchases. Their reaction would initially shift
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
101. The initial impact of an increase in an investment tax credit is to shift
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
102. The initial impact of the repeal of an investment tax credit is to shift
a.
aggregate demand right.
b.
aggregate demand left.
c.
aggregate supply right.
d.
aggregate supply left.
103. Other things the same, when the government spends more, the initial effect is that
a.
aggregate demand shifts right.
b.
aggregate demand shifts left.
c.
aggregate supply shifts right.
d.
aggregate supply shifts left.
104. Tax cuts shift aggregate demand
a.
right as do increases in government spending.
b.
right while increases in government spending shift aggregate demand left.
c.
left as do increases in government spending.
d.
left while increases in government spending shift aggregate demand right.
105. When the money supply increases
a.
interest rates fall and so aggregate demand shifts right.
b.
interest rates fall and so aggregate demand shifts left.
c.
interest rates rise and so aggregate demand shifts right.
d.
interest rates rise and so aggregate demand shifts left.
106. When the Fed buys bonds
a.
the supply of money increases and so aggregate demand shifts right.
b.
the supply of money decreases and so aggregate demand shifts left.
c.
the supply of money decreases and so aggregate demand shifts right.
d.
the supply of money increases and so aggregate demand shifts left.
107. When the money supply decreases