econ chapter 13

A negative AD shock will decrease the real growth rate in

the short run only.

Which curve shows the positive relationship between the inflation rate and real growth during the period when prices and wages are sticky?

the short-run aggregate supply curve

According to the AD curve, if is 5 percent, the rate of inflation is 3 percent, and the rate of real growth is 2 percent, then what must be

0 The rate of spending growth for this AD curve is 5 percent.

According to the AD curve, if is 5 percent, is 0 percent, and the real growth rate is 3 percent, what must be the rate of inflation?

2 percent The rate of spending growth for this AD curve is 5 percent.

According to the AD curve, if in a certain economy in a given year the money supply rises from $1,000 billion to $1,050 billion, the velocity of money is stable, and real GDP rises from $12,000 billion to $12,240 billion, what must be the rate of inflation in this year?

3%

According to the AD curve, if m>+v> is 8 percent, while the rate of real growth is 3 percent, what must be the rate of inflation?

5 percent The rate of spending growth for this AD curve is 8 percent.

Which pair of points could lie on the same aggregate demand curve? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesA and GB and FB and EA and D

A and G

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesA decrease in velocity, ceteris paribus, will shift the AD curve down and to the left.The slope of the AD curve is 1.An increase in spending growth shifts the AD curve inward, down and to the left.Any combination of inflation and real growth that adds up to the same spending growth rate is not on the same AD curve.

A decrease in velocity, ceteris paribus, will shift the AD curve down and to the left.

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesA spending increase creates a temporary increase in growth.When unexpected inflation becomes expected inflation, it causes no change in the SRAS curve.Prices move instantly to their new long-run equilibrium, thus preventing any increase in growth brought about by a spending increase.In the long run, an increase in spending growth is split between increases in inflation and increases in real growth.

A spending increase creates a temporary increase in growth.

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesAn increase in spending growth shifts the AD curve outward, up and to the right.The slope of the AD curve is 1.A decrease in velocity, ceteris paribus, will shift the AD curve up and to the right.Any combination of inflation and real growth that adds up to the same spending growth rate is not on the same AD curve.

An increase in spending growth shifts the AD curve outward, up and to the right. This is the correct statement.

If the rate of real growth is fixed by real factors, what will accompany changes in and

If the rate of real growth is fixed by real factors, changes in and can change only the inflation rate. On a given long-run aggregate supply curve, a shift of the AD curve will only affect the rate of inflation at which the two curves intersect.

Which is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesThe Solow growth curve is horizontal, because the potential growth rate does not depend on the rate of inflation.A nominal shock is any shock that increases or decreases the potential growth rate.The Solow growth rate is an economy's lowest possible growth rate.If the rate of spending growth is 10 percent and the Solow growth rate is 4 percent, then the rate of inflation must be 6 percent.

If the rate of spending growth is 10 percent and the Solow growth rate is 4 percent, then the rate of inflation must be 6 percent.

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesIncreasing confidence will shift the AD curve right.Increased export growth (or decreased import growth) would cause a negative aggregate demand shock.Higher taxes would cause a positive aggregate demand shock.An increase in the growth rate of the money supply would be a negative aggregate demand shock.

Increasing confidence will shift the AD curve right.

According to the AD curve, if in a certain economy in a given year the money supply rises from $1,000 billion to $1,050 billion, real GDP rises from $12,000 billion to $12,240 billion, and the rate of inflation is 4 percent, then what must have happened to the velocity of money in this same year?

It rose by 1 percent.

If the rate of spending growth decreases, what happens to the aggregate demand curve?

The AD curve shifts down and to the left. If inflation is constant, the real growth rate of GDP must fall; if the real growth rate of GDP is constant, inflation must fall.

What is TRUE regarding the causes of the Great Depression?

The Great Depression was caused by a combination of real shocks and aggregate demand shocks.

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesA recession is a significant, widespread increase in real income and employment.Business fluctuations are fluctuations in the growth rate of short-run GDP around its trend growth rate.The aggregate demand curve shows all of the points where plus equals inflation plus real GDP growth.The aggregate demand curve shows all of the combinations of inflation and nominal GDP growth that are consistent with a specified rate of spending growth.

The aggregate demand curve shows all of the points where m>plus v> equals inflation plus real GDP growth.

Which would cause the LRAS to shift right?

lower price of oil

Which statement is TRUE? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesProduction costs are the costs of changing prices.Unexpected inflation always turns into expected inflation.An increase in the growth rate of the money supply would be a negative aggregate demand shock.Higher taxes would cause a positive aggregate demand shock.

Unexpected inflation always turns into expected inflation.

Which event would cause a change in the growth rate of the velocity of money? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesa change in the productivity of labora change in the weathera change in the growth rate of the money supplya change in the growth rate of consumption

a change in the growth rate of consumption

Which would NOT shift the AD curve to the right? a decrease in taxes increased export growth an increase in money growth a decrease in wealth

a decrease in wealth

Which factor decreases aggregate demand?

decreased export growth As shown in Table 32.2, decreased export growth is one of the factors that decreases aggregate demand.

When India's agricultural output falls, so does India's GDP. This is:

due in part to the fact that other parts of the Indian economy will suffer when farmers suffer. For instance, the demand for tractors will go down, and the shock spreads to other parts of the economy.

Which would cause the LRAS to shift right?

good weather

Which factor decreases aggregate demand?

higher taxes

Which would cause the LRAS to shift right? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choiceshigher price of oila production disruption caused by a hurricanemore government regulationlower taxes

lower taxes

In an economy with a large manufacturing sector, a reduction in the oil supply is like a reduction in _____ in an agricultural economy.

rainfall

In many countries, such as India, when the weather fluctuates:

so does GDP.

Rapid and unexpected shifts in spending matter for the economy most when wages and prices are:

sticky.