Question 1

Per-unit production cost is determined by dividing output by total input cost.

Accepted Answer

A) True 
 B)False

Question 2

The following aggregate demand and supply schedules are for a hypothetical economy:
 
-Refer to the above data. The equilibrium price level will be:

Accepted Answer

A)   150.
B)   200.
C)   250.
D)   300.E) C) and D)
F) None of the above

Question 3

Refer to the diagram below. Other things equal, a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n) : 0 to AS1 might be caused by a(n) :   A)  increase in government regulation. B)  increase in aggregate demand. C)  increase in productivity. D)  decline in nominal wages." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   increase in government regulation.
B)   increase in aggregate demand.
C)   increase in productivity.
D)   decline in nominal wages.E) B) and C)
F) All of the above

Question 4

An increase in the aggregate expenditures schedule:

Accepted Answer

A)   increases aggregate demand by the amount of the increase in aggregate expenditures only.
B)   increases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier.
C)   decreases aggregate demand by the amount of the increase in aggregate expenditures.
D)   decreases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier.E) All of the above
F) A) and B)

Question 5

An increase in government spending can be expected to shift the:

Accepted Answer

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

Question 6

An increase in the GDP price level will:

Accepted Answer

A)   decrease aggregate demand.
B)   increase the quantity of real domestic output demanded.
C)   increase aggregate demand.
D)   decrease the quantity of real domestic output demanded.E) A) and B)
F) A) and C)

Question 7

Refer to the data below. The vertical range of the aggregate supply curve is associated with price levels: The following aggregate demand and supply schedules are for a hypothetical economy:

Accepted Answer

A)   150 and 200.
B)   150 and 300.
C)   200 and 250.
D)   250 and 300.E) A) and B)
F) None of the above

Question 8

1 to AS3, then real domestic output will: A)  increase and the price level will increase. B)  increase and the price level will decrease. C)  decrease and the price level will increase. D)  decrease and the price level will decrease." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram. If aggregate supply shifts from AS1 to AS3, then real domestic output will:

Accepted Answer

A)   increase and the price level will increase.
B)   increase and the price level will decrease.
C)   decrease and the price level will increase.
D)   decrease and the price level will decrease.E) B) and C)
F) A) and D)

Question 9

Which of the following is incorrect?

Accepted Answer

A)   As the Canadian price level rises, Canadian goods become relatively more expensive so that its exports fall and its imports rise.
B)   As the price level falls, the demand for money declines, the interest rate declines, and interest rate-sensitive spending increases.
C)   When the price level increases, real balances increase, businesses and households find themselves wealthier and therefore increase their spending.
D)   Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward flexible prices, reduces the price level.E) A) and B)
F) A) and C)

Question 10

The aggregate demand curve can be derived from the aggregate expenditures model as indicated by the fact that:

Accepted Answer

A)   a decrease in the price level shifts the aggregate expenditures schedule downward and decreases real GDP.
B)   a decrease in the price level shifts the aggregate expenditures schedule upward and decreases real GDP.
C)   an increase in the price level shifts the aggregate expenditures schedule upward and increases real GDP.
D)   an increase in the price level shifts the aggregate expenditures schedule downward and decreases real GDP.E) All of the above
F) B) and C)

Question 11

Refer to the information below. A change in net export spending would most likely be caused by changes in: The following list of factors is related to the aggregate demand curve.

Accepted Answer

A)   2 and 3.
B)   5 and 6.
C)   7 and 8.
D)   6 and 9.E) B) and D)
F) A) and B)

Question 12

1 shifts to AD2, then the equilibrium output and price level are: A)  P1 and Q3. B)  P2 and Q3. C)  P1 and Q2. D)  P2 and Q2." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram. If AD1 shifts to AD2, then the equilibrium output and price level are:

Accepted Answer

A)   P1 and Q3.
B)   P2 and Q3.
C)   P1 and Q2.
D)   P2 and Q2.E) A) and B)
F) All of the above

Question 13

Assume that an initial change in spending of $10 billion results in a rightward shift in aggregate demand that increases real GDP by $40 billion. The multiplier is:

Accepted Answer

A)   $10 billion.
B)   $40 billion.
C)   4.
D)   5.E) All of the above
F) B) and D)

Question 14

Which of the factors below best explain the downward slope of aggregate demand curve? The following list of factors, are related to the aggregate demand curve.

Accepted Answer

A)   2, 4, and 6
B)   7, 9, and 10
C)   1, 3, and 8
D)   4, 6, and 7E) B) and C)
F) A) and D)

Question 15

An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labour to produce its total output of 640 units. Each unit of capital costs $10, each unit of raw materials, $4, and each unit of labour, $3.
-Refer to the above information. As a result of the change indicated in the previous question, the aggregate:

Accepted Answer

A)   supply curve would shift to the left.
B)   supply curve would shift to the right.
C)   demand curve would shift to the left.
D)   demand curve would shift to the right.E) A) and B)
F) A) and C)

Exam 10: Aggregate Demand and Aggregate Supply

Refer to the diagram below. Other things equal, a shift of the aggregate supply curve from AS₀ to AS₁ might be caused by a(n) :

Correct Answer
verified

An increase in the aggregate expenditures schedule:

Correct Answer
verified

An increase in the GDP price level will:

Correct Answer
verified

Refer to the data below. The vertical range of the aggregate supply curve is associated with price levels: The following aggregate demand and supply schedules are for a hypothetical economy:

Correct Answer
verified

The aggregate demand curve can be derived from the aggregate expenditures model as indicated by the fact that:

Correct Answer
verified

Correct Answer
verified

-Refer to the above diagram. If AD₁ shifts to AD₂, then the equilibrium output and price level are:

Correct Answer
verified

Per-unit production cost is determined by dividing output by total input cost.

Correct Answer
verified

Assume that an initial change in spending of $10 billion results in a rightward shift in aggregate demand that increases real GDP by $40 billion. The multiplier is:

Correct Answer
verified

Which of the factors below best explain the downward slope of aggregate demand curve? The following list of factors, are related to the aggregate demand curve.

Correct Answer
verified

The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data. The equilibrium price level will be:

Correct Answer
verified

Refer to the information below. A change in net export spending would most likely be caused by changes in: The following list of factors is related to the aggregate demand curve.

Correct Answer
verified

-Refer to the above diagram. If aggregate supply shifts from AS₁ to AS₃, then real domestic output will:

Correct Answer
verified

An increase in government spending can be expected to shift the:

Correct Answer
verified

Which of the following is incorrect?

Correct Answer
verified

Exam 10: Aggregate Demand and Aggregate Supply

Refer to the diagram below. Other things equal, a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n) :

Correct AnswerverifiedShow Answer

An increase in the aggregate expenditures schedule:

Correct AnswerverifiedShow Answer

An increase in the GDP price level will:

Correct AnswerverifiedShow Answer

Refer to the data below. The vertical range of the aggregate supply curve is associated with price levels: The following aggregate demand and supply schedules are for a hypothetical economy:

Correct AnswerverifiedShow Answer

The aggregate demand curve can be derived from the aggregate expenditures model as indicated by the fact that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-Refer to the above diagram. If AD1 shifts to AD2, then the equilibrium output and price level are:

Correct AnswerverifiedShow Answer

Per-unit production cost is determined by dividing output by total input cost.

Correct AnswerverifiedShow Answer

Assume that an initial change in spending of $10 billion results in a rightward shift in aggregate demand that increases real GDP by $40 billion. The multiplier is:

Correct AnswerverifiedShow Answer

Which of the factors below best explain the downward slope of aggregate demand curve? The following list of factors, are related to the aggregate demand curve.

Correct AnswerverifiedShow Answer

The following aggregate demand and supply schedules are for a hypothetical economy: -Refer to the above data. The equilibrium price level will be:

Correct AnswerverifiedShow Answer

Refer to the information below. A change in net export spending would most likely be caused by changes in: The following list of factors is related to the aggregate demand curve.

Correct AnswerverifiedShow Answer

-Refer to the above diagram. If aggregate supply shifts from AS1 to AS3, then real domestic output will:

Correct AnswerverifiedShow Answer

An increase in government spending can be expected to shift the:

Correct AnswerverifiedShow Answer

Which of the following is incorrect?

Correct AnswerverifiedShow Answer

Refer to the diagram below. Other things equal, a shift of the aggregate supply curve from AS₀ to AS₁ might be caused by a(n) :

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-Refer to the above diagram. If AD₁ shifts to AD₂, then the equilibrium output and price level are:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-Refer to the above diagram. If aggregate supply shifts from AS₁ to AS₃, then real domestic output will:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified