Chapter 12 Econ quiz
Which of the following would most likely shift the aggregate demand curve to the right?
an increase in stock prices that increases consumer wealth
The immediate-short-run aggregate supply curve represents circumstances where:
both input and output prices are fixed.
Other things equal, appreciation of the dollar
decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources.
Consumers become more pessimistic about the economy.
demand decreases
Government spending increases
demand increases
The United States enters into an arms race with china, resulting in a significant increase in military spending.
demand increases
The spread of democracy around the world increases consumer confidence in the United States
demand increases
The determinants of aggregate demand
explain shifts in the aggregate demand curve.
In the diagram, a shift from AS1 to AS3 might be caused by a(n)
increase in the prices of imported resources
Graphically, cost-push inflation is shown as a
leftward shift of the AS curve
A stock market crash reduces people's wealth
Demand decreases
The immediate short-run aggregate supply curve is
Horizontal
A new computer chip is developed that is faster and cheaper than previous chips
Supply increases
In the accompanying figure, a shift from AD2 to AD1 would be consistent with what economic event in U.S. history?
World War 2 in the 1940's
Which one of the following would not shift the aggregate demand curve
a change in the price level
Productivity measures
real output per unit of input
Graphically, demand-pull inflation is shown as a:
rightward shift of the AD curve along an upsloping AS curve.
A hurricane destroys manufacturing plants
supply decreases
A revolution in Iran results in a significant reduction in the world's supply of oil
supply decreases
Employers are required to provide paid sick leave to part time as well as full time employees
supply decreases
Manufacturing firms expect steel prices to decrease significantly
supply increases
Technological changes enable workers to be more productive
supply increases
per-unit production cost is
total input cost divided by units of output
An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. The per-unit cost of production in this economy is
$0.10
In the diagram, the economy's immediate-short-run AS curve is line ________, it's short-run AS curve is _______, and it's long-run AS curve is line ______.
3, 2, 1
In the diagram, the economy's relevant aggregate demand and immediate short-Tun aggregate supply curves, respectively, are lines
4 and 3
Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to
A price level that is inflexible downward
A widespread fear by consumers of an impending economic depression
Aggregate demand will decrease
A 10 percent across-the-board reduction in personal income tax rates.
Aggregate demand will increase
A major increase in spending for health care by the federal government.
Aggregate demand will increase
A reduction in interest rates
Aggregate demand will increase
An increase in exports that exceeds an increase in imports (not due to tariffs)
Aggregate demand will increase
The general expectation of coming rapid inflation
Aggregate demand will increase
A 12 percent increase in nominal wages (with no change in productivity)
Aggregate supply will decrease
A new national tax on producers based on the value added between the costs of the inputs and the revenue received from their output.
Aggregate supply will decrease
A sizeable increase in labor productivity (with no change in nominal wages)
Aggregate supply will increase
The complete disintegration of OPEC, causing oil prices to fall by one-half
Aggregate supply will increase
At the current price level, producers supply $375 billion of final goods and services while consumers purchase $355 billion of final goods and services. The price level is:
above equilibrium