169. Refer to Exhibit 8-3. A movement from point A to point B on AD1 would have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an increase in income taxes.
d.
a decrease in income taxes.
170. Refer to Exhibit 8-3. A movement from point B to point A on AD1 would have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an increase in foreign real national income.
d.
a decrease in foreign real national income.
United States – BUSPROG: Analytic
Bloom’s: Application
171. Refer to Exhibit 8-3. A shift in aggregate demand from AD1 to AD2 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an increase in foreign real national income.
United States – BUSPROG: Analytic
Bloom’s: Application
d.
a decrease in foreign real national income.
172. Refer to Exhibit 8-3. A shift in aggregate demand from AD1 to AD2 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
a decrease in interest rates (which was not prompted by a change in the price level).
d.
an increase in interest rates (which was not prompted by a change in the price level).
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
173. Refer to Exhibit 8-3. A shift in aggregate demand from AD2 to AD1 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
businesses become more optimistic about future sales.
d.
businesses become more pessimistic about future sales.
United States – BUSPROG: Analytic
Bloom’s: Application
174. Refer to Exhibit 8-3. Which of the following could not have caused a shift in aggregate demand from AD1 to AD2?
a.
b.
c.
d.
e.
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
Exhibit 8-4
175. Refer to Exhibit 8-4. Which of the following could not have caused a shift in aggregate supply from SRAS1 to
SRAS2?
a.
an increase in productivity
b.
a beneficial supply shock
c.
a decrease in the price of a nonlabor input
d.
a change in the price level
e.
a decrease in wage rates
United States – BUSPROG: Analytic
Bloom’s: Application
176. Refer to Exhibit 8-4. A shift in short-run aggregate supply from SRAS2 to SRAS1 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an increase in wage rates.
d.
a decrease in wage rates.
United States – BUSPROG: Analytic
Bloom’s: Application
177. Refer to Exhibit 8-4. A shift in short-run aggregate supply from SRAS1 to SRAS2 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an adverse supply shock.
d.
a beneficial supply shock.
1
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
178. Refer to Exhibit 8-4. A movement from point A to point B on SRAS1 could have been the result of
a.
a decrease in the price level.
b.
an increase in the price level.
c.
an adverse supply shock.
d.
a beneficial supply shock.
1
United States – BUSPROG: Analytic
Bloom’s: Application
New
179. When foreign real national income rises, domestic Real GDP falls, ceteris paribus.
a.
True
b.
False
1
United States – BUSPROG: Analytic
Bloom’s: Application
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
New
180. The short-run aggregate supply curve slopes upward as a result of the real balance effect, the interest rate effect, and
the international trade effect.
a.
True
b.
False
181. Unusually good weather that improves crop production and a major oil discovery are both examples of a beneficial
supply shock.
a.
True
b.
False
True
1
Easy
Bloom’s: Application
182. The level of Real GDP that the economy produces in long-run equilibrium is Natural Real GDP.
a.
True
b.
False
True
1
Easy
United States – BUSPROG: Analytic
Bloom’s: Knowledge
183. Some of the factors that can shift the short-run aggregate supply curve can also cause a shift in the long-run
aggregate supply curve.
a.
True
b.
False
True
1
Moderate
Bloom’s: Comprehension
False
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Comprehension
184. When wage rates rise the short-run aggregate supply curve shifts to the right.
a.
True
b.
False
185. As interest rates drop, households tend to borrow more and businesses tend to borrow less.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Comprehension
186. Only a change in the price level can cause a movement from one point to another point along a given aggregate
demand curve.
a.
True
b.
False
True
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Comprehension
187. A change in the money supply can affect one or more of the components of spending and therefore shift the short-run
aggregate supply (SRAS) curve.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
False
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Comprehension
188. The level of Real GDP and the price level always have a direct relationship.
a.
True
b.
False
189. An adverse supply shock results in an increase in the price level and an increase in Real GDP.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Comprehension
190. If businesses are optimistic about future sales, the short-run aggregate supply curve will shift leftward.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Comprehension
191. As the dollar depreciates, foreign goods become more expensive for Americans to purchase.
a.
True
b.
False
True
1
Challenging
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
192. When the dollar appreciates, U.S. net exports fall and aggregate demand decreases.
a.
True
False
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Knowledge
New
b.
False
193. The interest rate effect, the real balance effect, and the international trade effect all begin with a change in the price
level.
a.
True
b.
False
True
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Comprehension
194. The interest rate effect occurs because a change in interest rates causes a change in the price level.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
195. The aggregate demand (AD) curve is the graphical representation of production in the short run.
a.
True
b.
False
False
1
Moderate
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Knowledge
196. If velocity is rising, an increase in one spending component can occur without requiring other spending components
to decline.
a.
True
b.
False
True
1
Challenging
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
197. In short-run equilibrium, the quantities supplied and demanded of Real GDP can be less than or greater than Natural
Real GDP.
a.
True
b.
False
True
1
Moderate
Bloom’s: Comprehension
198. Assume that the economy is currently in short-run equilibrium, then the U.S. dollar appreciates in the foreign
exchange market. Describe the correct sequence of events that happens as the economy adjusts to a new short-run
equilibrium.
1
Challenging
United States – BUSPROG: Analytic
Bloom’s: Analysis
199. List and describe the three effects that help to explain why the aggregate demand (AD) curve slopes downward.
True
1
Moderate
United States – BUSPROG: Analytic
Bloom’s: Application
200. Explain why the short-run aggregate supply curve (SRAS) is upward sloping, while the long-run aggregate supply
(LRAS) curve is a vertical line.
United States – OH – Default City – DISC: Aggregate demand and aggre – DISC: Aggregate
Bloom’s: Comprehension
201. Assume that the economy is currently in short-run equilibrium, then personal income taxes decline. Describe the
correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be sure to state what the
impact would be on the price level and Real GDP).
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: Aggregate demand and aggre – DISC: Aggregate
202. Explain how aggregate demand and aggregate supply may affect your job prospects after you leave college. Support
your answer with an appropriate example.
run aggregate supply curve in the economy intersect. Supporting examples will vary.
United States – OH – Default City – DISC: Aggregate demand and aggre – DISC: Aggregate
Bloom’s: Application
Economics 24/7
203. Assume that the economy is currently in short-run equilibrium, then the dollar appreciates in the foreign exchange
market. Describe the correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be
sure to state what the impact would be on the price level and Real GDP).
United States – OH – Default City – DISC: Aggregate demand and aggre – DISC: Aggregate
Bloom’s: Comprehension
204. Suppose that a worker has the option of being paid in euros or dollars. It would be to the workers advantage if his
employer pays him in ____________ rather than ______________ if the worker believes that the value of the dollar is
about to ____________ relative to the value of the euro.
a.
euros; dollars; fall
b.
dollars; euros; rise
c.
euros; dollars; rise
d.
dollars; euros; fall
e.
a and b
United States – BUSPROG: Analytic
demand and aggregate supply
Bloom’s: Application
Economics 24/7
United States – BUSPROG: Analytic
Bloom’s: Analysis