Question 1

Use the Aggregate Supply- Aggregate Demand model to determine which of the following will lead to higher prices

Accepted Answer

A)  a tax increase.
B)  an increase in interest rates.
C)  a fall in world oil prices.
D)  an increase in government spending.E) B) and C)
F) A) and B)

Question 2

When domestic prices rise

Accepted Answer

A)  the buying power of cash assets falls.
B)  interest sensitive consumption rises.
C)  exports rise.
D)  business investment rises because interest rates fall.E) A) and C)
F) A) and B)

Question 3

When domestic prices rise

Accepted Answer

A)  people buy fewer imported goods.
B)  exports fall.
C)  exports rise.
D)  interest sensitive consumption rises.E) A) and D)
F) C) and D)

Question 4

Policies focused on putting people to work by reducing the costs to their employers would be considered

Accepted Answer

A)  demand side policies.
B)  supply side policies.
C)  monetary policies.
D)  demand side and supply side policies.E) None of the above
F) A) and C)

Question 5

An increase in regulation will cause

Accepted Answer

A)  AD to increase (move to the right) .
B)  AD to decrease (move to the left) .
C)  AS to increase (move to down and to the right) .
D)  AS to decrease (move to up and to the left) .E) All of the above
F) C) and D)

Question 6

Suppose as a reaction to terrorist attacks the U.S. government were to create a new branch of the military employing 1,000,000 new service men and women to monitor malls, large sporting events, and infrastructure (bridges, dams, refineries, etc.) Hiring and paying these people would likely

Accepted Answer

A)  increase aggregate demand.
B)  increase aggregate supply.
C)  decrease aggregate demand.
D)  decrease aggregate supply.E) All of the above
F) None of the above

Question 7

A decrease in government regulation will shift

Accepted Answer

A)  aggregate demand to the right.
B)  aggregate demand to the left.
C)  aggregate supply to the right.
D)  aggregate supply to the left.E) None of the above
F) A) and B)

Question 8

If Iraq were to become a stable oil producing friend of the U.S., this would likely

Accepted Answer

A)  increase aggregate demand.
B)  increase aggregate supply.
C)  decrease aggregate demand.
D)  decrease aggregate supply.E) B) and D)
F) A) and D)

Question 9

A major point of difference between President Obama and Senator McCain in the 2008 campaign was

Accepted Answer

A)  the wisdom of stabilizing the U.S. banking system.
B)  the desirability of increasing the federal minimum wage.
C)  the temporary Bush tax cuts of 2003.
D)  all of the options are correct.E) A) and C)
F) B) and D)

Question 10

Which of the following is not a reason for the aggregate demand curve to be downward sloping?

Accepted Answer

A)  Foreign purchases effect
B)  Interest rate effect
C)  Real balance effect
D)  Diminishing marginal utilityE) A) and D)
F) C) and D)

Question 11

The use of a backward-L shaped aggregate supply curve allows us to ________ in a way that other shapes would not.

Accepted Answer

A)  consider various levels of prices
B)  consider different macroeconomic points of view
C)  deal with shifting curves
D)  create an equilibriumE) A) and B)
F) None of the above

Question 12

If a supply-side economist were to make a suggestion to stimulate economic activity which of the following policies would she suggest

Accepted Answer

A)  An increase in the minimum wage
B)  A repeal of regulations on business
C)  The creation of employer-mandated benefits
D)  An increase in the corporate income taxE) A) and B)
F) A) and C)

Question 13

A strengthening of the U.S. dollar relative to the euro can cause problems for

Accepted Answer

A)  American exporters.
B)  American importers.
C)  European manufacturers.
D)  American banks.E) C) and D)
F) All of the above

Question 14

An increase in government spending will cause

Accepted Answer

A)  AD to increase (move to the right) .
B)  AD to decrease (move to the left) .
C)  AS to increase (move to down and to the right) .
D)  AS to decrease (move to up and to the left) .E) B) and C)
F) A) and B)

Question 15

A weakening of the dollar will immediately shift

Accepted Answer

A)  aggregate demand to the right.
B)  aggregate demand to the left.
C)  aggregate supply to the right.
D)  aggregate supply to the left.E) C) and D)
F) All of the above

Question 16

Reduction of marginal tax rates undertaken explicitly to increase incentives of innovate, take risks, and work hard would be an example of

Accepted Answer

A)  supply-side economics.
B)  incentives-based deprecation.
C)  Keynesian economics.
D)  Progressivism.E) B) and D)
F) C) and D)

Question 17

Congress and the President have control of the tax system and government spending. As a result their policies will directly impact

Accepted Answer

A)  aggregate supply.
B)  residual demand.
C)  aggregate demand.
D)  the demand for loanable dollars.E) All of the above
F) A) and D)

Question 18

Which of the following will increase macroeconomic equilibrium real gross domestic product?

Accepted Answer

A)  a decrease in government spending.
B)  a decrease in productivity.
C)  an increase in taxes.
D)  a decrease in input prices.E) C) and D)
F) A) and B)

Question 19

The aggregate supply-aggregate demand diagram models

Accepted Answer

A)  the behavior of individual consumers.
B)  the behavior of individual firms.
C)  the economy as a whole.
D)  the interaction of producers and consumers for a particular good or service.E) A) and C)
F) A) and B)

Question 20

The aggregate demand curve is downward sloping because of the

Accepted Answer

A)  foreign purchases effect.
B)  interest rate effect.
C)  real balance effect.
D)  all of the options are correct.E) B) and C)
F) A) and B)

Exam 8: Aggregate Demand and Aggregate Supply

Congress and the President have control of the tax system and government spending. As a result their policies will directly impact

Correct AnswerverifiedShow Answer

If Iraq were to become a stable oil producing friend of the U.S., this would likely

Correct AnswerverifiedShow Answer

Reduction of marginal tax rates undertaken explicitly to increase incentives of innovate, take risks, and work hard would be an example of

Correct AnswerverifiedShow Answer

The aggregate demand curve is downward sloping because of the

Correct AnswerverifiedShow Answer

A strengthening of the U.S. dollar relative to the euro can cause problems for

Correct AnswerverifiedShow Answer

If a supply-side economist were to make a suggestion to stimulate economic activity which of the following policies would she suggest

Correct AnswerverifiedShow Answer

Policies focused on putting people to work by reducing the costs to their employers would be considered

Correct AnswerverifiedShow Answer

Use the Aggregate Supply- Aggregate Demand model to determine which of the following will lead to higher prices

Correct AnswerverifiedShow Answer

The aggregate supply-aggregate demand diagram models

Correct AnswerverifiedShow Answer

The use of a backward-L shaped aggregate supply curve allows us to ________ in a way that other shapes would not.

Correct AnswerverifiedShow Answer

Which of the following will increase macroeconomic equilibrium real gross domestic product?

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Which of the following is not a reason for the aggregate demand curve to be downward sloping?

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An increase in government spending will cause

Correct AnswerverifiedShow Answer

A major point of difference between President Obama and Senator McCain in the 2008 campaign was

Correct AnswerverifiedShow Answer

When domestic prices rise

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A weakening of the dollar will immediately shift

Correct AnswerverifiedShow Answer

A decrease in government regulation will shift

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An increase in regulation will cause

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When domestic prices rise

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Suppose as a reaction to terrorist attacks the U.S. government were to create a new branch of the military employing 1,000,000 new service men and women to monitor malls, large sporting events, and infrastructure (bridges, dams, refineries, etc.) Hiring and paying these people would likely

Correct AnswerverifiedShow Answer

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