chapter 12 macro

C

A rightward shift in the aggregate supply curve is best explained by an increase in A) Business taxes. B) Nominal wages. C) Productivity. D) The price of imported resources.

C

Disinflation refers to a situation where A) The rate of inflation rises, but the price level does not. B) The price level falls, but the rate inflation does not. C) The rate of inflation falls, but the price level does not. D) The price level rises, but the rate of inflation does not.

D

If the dollar depreciates in value relative to foreign currencies, then aggregate A) Supply and aggregate demand decrease. B) Demand decreases. C) Supply and aggregate demand increase. D) Demand increases

A

Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. A recession is depicted by A) A and B. B) A. C) B. D) C.

C

The aggregate demand curve or schedule shows the relationship between the total demand for output and the A) ncome level. B) nterest rate. C) Price level. D) Real GDP.

A

The aggregate expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate expenditures model, A)The level of aggregate expenditures and therefore the level of real GDP vary inversely with the price level. B) Changes in the price level have no effect on the equilibrium level of GDP. C) The level of aggregate expenditures and therefore the level of real GDP vary directly with the price level. D) An increase in the price level increases the real value of wealth.

A

The expenditure multiplier concept of the aggregate expenditures model A) Magnifies the shifts of the aggregate demand curve. B) Is not at all relevant in the AD-AS model. C) Explains movement up or down the aggregate demand curve. D) Reverses the shift of the aggregate demand curve.

A

The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will A) Increase U.S. imports and decrease U.S. exports. B) Increase the amount of U.S. real output purchased. C) Increase both U.S. imports and U.S. exports. D) Decrease both U.S. imports and U.S. exports.

C

The size of the multiplier associated with an initial increase in spending will be A) Enhanced if inflation occurs. B) The same whether or not inflation occurs. C) Diminished if inflation occurs. D) Zero if any increase in the price level occurs.

C

Which would most likely shift the aggregate supply curve? A change in the prices of A) Financial assets. B) Foreign products. C) Resources. D) Domestic products.

D

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image036ch32a.png Which of the diagrams for the U.S. economy best portrays the effects of a substantial reduction in government spending? A) B B) A C) C D) D

A

A) Real-Balances Effect 2) Household Expectations 3) Interest-Rate Effect 4) Personal Income Tax Rates 5) Profit Expectations 6) National Incomes Abroad 7) Government Spending 8) Foreign Purchases Effect 9) Exchange Rates 10)Degree of Excess Capacity Answer the question based on the accompanying list of factors that are related to the aggregate demand curve. Changes in which two of the factors would most likely cause a shift in aggregate demand due to a change in consumer spending? A) 2 and 4 B) 8 and 9 C) 1 and 3 D) 5 and 10

B

The aggregate supply curve (short run) is upsloping because A) Wages and other resource prices are flexible upward but inflexible downward. B) Per-unit production costs rise as the economy moves toward and beyond its full-employment real output. C) The price level is flexible upward but inflexible downward. D) Wages and other resource prices match changes in the price level.

B

The factors that affect the amounts that consumers, businesses, government, and foreigners wish to purchase at each price level are the A) Real-balances, interest-rate, and foreign purchases effects. B) Determinants of aggregate demand. C) Determinants of aggregate supply. D) Sole determinants of the equilibrium price level and the equilibrium real output.

B

The long-run aggregate supply analysis assumes that A) Both input and product prices are fixed. B) Both input and product prices are variable. C) Input prices are variable, while product prices are fixed. D) Input prices are fixed, while product prices are variable.

A

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image022ch32a1.png Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, a decline in productivity is depicted by A) B. B) B and C. C) C. D) A.

B

https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image031ch32b.png In the accompanying figure, if AD1 shifts to AD2, then the equilibrium output A) Increases from Q1 to Q2 while the price level falls from P2 to P1. B) Increases from Q1 to Q2 while the price level rises from P1 to P2. C) Increases from Q1 to Q3 while the price level falls from P2 to P1. D) Increases from Q1 to Q3 while the price level rises from P1 to P2.

D

An increase in input productivity will A) Reduce the equilibrium real output. B) Shift the aggregate supply curve leftward. C) Reduce aggregate demand. D) Reduce the equilibrium price level, assuming downward flexible prices.

B

Wage contracts, efficiency wages, and the minimum wage are explanations for why A) Competition results in price wars. B) Wages tend to be inflexible downward. C) There is little support for the existence of a real-balances effect. D) The aggregate demand curve slopes downward.