Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
106. Which of the above diagrams best portrays an improvement in expected rates of return
on investment?
107. Which of the above diagrams best portrays the effects of declines in the incomes of U.S.
trading partners?
108. Which of the above diagrams best portrays the effects of declines in the prices of
imported resources?
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
12–42
109. Which of the above diagrams best portrays the effects of a substantial reduction in
government spending?
110. Which of the above diagrams best portrays the effects of a dramatic increase in energy
prices?
Answer the question on the basis of the following table 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 other questions using the same table, unless otherwise stated.
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
111. Refer to the above table. Which of the following schedules constitutes aggregate demand
in this country?
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
112. Refer to the above table. The interest-rate effect of changes in the price level is shown by
columns:
113. Refer to the above table. The real-balances effect of changes in the price level is:
114. Refer to the above table. If equilibrium real GDP is $31 billion, the equilibrium price
level will be:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
115. Refer to the above table. If the amounts of GDP supplied at the price levels shown (in
descending order) are $45, $43, $40, $37, and $31, the equilibrium level of real GDP will be:
116. Refer to the above table. If the amounts of GDP supplied at the price levels shown (in
descending order) are $27, $25, $22, $18, and $13, the equilibrium price level will be:
117. Refer to the above table. If this nation’s equilibrium price level is 125, its net exports will
be:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
118. Refer to the above table. If the equilibrium level of real GDP is $43 billion, its level of
consumption will be:
119. Refer to the above table. A decline in the international value of the dollar would:
120. Refer to the above table. A decrease in the interest rate not caused by a change in the
price level would:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
121. Refer to the above diagram. If equilibrium real output is Q2, then:
122. Refer to the above diagram. If the equilibrium price level is P1, then:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
123. Refer to the above diagram. Suppose that aggregate demand increased from AD1 to AD2.
For the price level to stay constant:
124. The size of the multiplier associated with an initial increase in spending will be:
125. Which of the following is a true statement?
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
126. Prices and wages tend to be:
127. Efficiency wages are:
128. When aggregate demand declines, wage rates may be inflexible downward, at least for a
time, because of:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
129. When aggregate demand declines, many firms may reduce employment rather than
wages because wage reductions may:
130. When aggregate demand declines, some firms may reduce employment rather than
wages because wage reductions may:
131. When aggregate demand declines, the price level may remain constant, at least for a
time, because:
Chapter 12 – Aggregate Demand and Aggregate Supply (+ Appendix)
132. Menu costs:
133. The fear of unwanted price wars may explain why many firms are reluctant to:
134. (Consider This) The idea that the price level readily moves upward but not downward is
called the: