QUESTION 1

1. Aggregate demand shifts right if at a given price level

   a.	net exports fall and shifts right if the money supply increases.
   b.	net exports rise and shifts left if the money supply increases.
   c.	net exports rise and shifts right if the money supply increases.
   d.	net exports fall and shifts left if the money supply increases.

1 points   

 

QUESTION 2

1. Other things the same, an increase in the amount of capital firms wish to purchase would initially shift

   a.	aggregate demand left.
   b.	aggregate demand right.
   c.	aggregate supply left.
   d.	aggregate supply right.

1 points   

 

QUESTION 3

1. Which of the following is correct concerning recessions?

   a.	They are any period when real GDP growth is less than average.
   b.	They tend to be associated with falling unemployment rates.
   c.	They come at fairly regular and predictable intervals.
   d.	They are associated with comparatively large declines in investment spending.

1 points   

 

QUESTION 4

1. Which of the following shifts short-run aggregate supply right?

   a.	an increase in the price of oil
   b.	an increase in the actual price level
   c.	an increase in the minimum wage
   d.	an increase in immigration from abroad

1 points   

 

QUESTION 5

1. Which of the following shifts aggregate demand to the right?

   a.	the repeal of an investment tax credit
   b.	a decrease in the price level
   c.	increases in the profitability of capital due perhaps to technological progress.
   d.	a decrease in the money supply

1 points   

 

QUESTION 6

1. During the 2008-2009 recession real GDP fell by about

   a.	2%
   b.	8%
   c.	4%
   d.	6%

1 points   

 

QUESTION 7

1. The classical dichotomy and monetary neutrality are represented graphically by 

   a.	an upward-sloping short-run aggregate-curve.
   b.	an upward-sloping long-run aggregate-supply curve.
   c.	a vertical long-run aggregate-supply curve.
   d.	a downward-sloping aggregate-demand curve.

1 points   

 

QUESTION 8

1. Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To explain this

   a.	it is only necessary that long-run aggregate supply shifts right over time.
   b.	it is only necessary that aggregate demand shifts right over time.
   c.	both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther.
   d.	None of the above cases would produce rising prices and growing real GDP over time.

1 points   

 

QUESTION 9

1. Which of the following is correct?

   a.	Over the business cycle consumption fluctuates more than investment.
   b.	Because of government policy the U.S. has suffered no recessions in the last 25 years.
   c.	Economic fluctuations are easy to predict.
   d.	During recessions sales and profits tend to fall.

1 points   

 

QUESTION 10

1. The long-run aggregate supply curve shifts right if

   a.	immigration from abroad increases.
   b.	the capital stock increases.
   c.	technology advances.
   d.	All of the above are correct.

1 points   

 

QUESTION 11

1. Which of the following shifts aggregate demand to the right?

   a.	The price level falls.
   b.	Congress reduces purchases of new weapons systems.
   c.	The Fed buys bonds in the open market.
   d.	Net exports fall.

1 points   

 

QUESTION 12

1. Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP growth and inflation can be explained by 

   a.	continuing technological progress alone.
   b.	continuing increases in the money supply alone.
   c.	continued technological progress and continuing increases in the money supply.
   d.	None of the above can explain continuing real GDP growth and inflation.

1 points   

 

QUESTION 13

1. Keynes explained that recessions and depressions occur because of

   a.	inadequate aggregate supply.
   b.	inadequate aggregate demand.
   c.	excess aggregate supply.
   d.	excess aggregate demand.

1 points   

 

QUESTION 14

1. 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.

1 points   

 

QUESTION 15

1. Which of the following shifts short-run aggregate supply left?

   a.	an increase in the actual price level
   b.	an increase in the expected price level
   c.	an increase in the capital stock
   d.	None of the above is correct.