1-As a nation approaches its steady state, the returns to capital         and the growth of real gross domestic product (GDP)         .

   

increase; increases

 

   

decrease; slows down

 

   

increase; slows down

 

   

remain unchanged; remains unchanged

 

 

 

2- Which of the following is true?

  

Long-run aggregate supply is independent of the price level.

  

Short-run aggregate supply is independent of the price level.

  

Long-run aggregate supply is positively related to the price level.

  

Short-run aggregate supply is inversely related to the price level.

 

 

 

3 - In the AD-AS model, technological advance leads to a shift in:

   

only long-run aggregate supply.

 

  

neither short-run nor long-run aggregate supply.

 

   

both short-run and long-run aggregate supply.

 

   

only aggregate demand.

 

 

4- During the Great Recession, the U.S. aggregate demand curve shifted to the left, in part, because:

   

the stock market declined in value by one-third.

 

   

there was a decline in the U.S. population.

 

   

there was an increase in expected income.

 

   

there was an increase in housing prices

 

 

 

5- Why do Social Security and Medicare pose problems for the US federal government budget?

   

The programs do not cover enough people.

 

   

The worker-to-retiree ratio is decreasing.

 

   

The number of retirees is decreasing.

 

   

The number of sick people is rising too quickly.

 

 

6- Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if, in the long run, we would expect prices to adjust and the economy to return to its long-run equilibrium on its own?

  

Expansionary fiscal policy always works in stimulating aggregate demand.

  

It could take a long time for prices to adjust by market forces alone.

  

Expansionary fiscal policy has no adverse effects on the economy.

  

Expansionary fiscal policy is easy to get approved by Congress and the president.

 

 

7- Expansionary monetary policy:

  

lowers interest rates, causing aggregate demand to shift to the right.

  

lowers interest rates, causing aggregate demand to shift to the left.

  

raises interest rates, causing aggregate demand to shift to the right.

  

raises interest rates, causing aggregate demand to shift to the left.

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Status NEW Posted 12 Jul 2017 05:07 AM My Price 10.00

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