macro econ quiz 26

Which of the following is evidence of an inflationary gap? a. Very low sales figures b. Very long search times for people looking for jobs c. Very long lines at employment agencies d. Very short waiting times for product delivery e. Very low unemployment rates

E

A higher expected price level would shift the short-run aggregate supply curve to the left, and a lower expected price level would shift the short-run aggregate supply curve to the right. a. True b. False

A

An increase in the nominal wage shifts the aggregate supply inward. a. True b. False

A

College graduates looking for jobs were less fortunate in 2010 than graduates in 2018. a. True b. False

A

Part of the normal aftermath of a period of excessive aggregate demand is a. stagflation. b. real GDP growth. c. All of these responses are correct. d. improvement in the quality of life. e. reflation.

A

A vertical aggregate supply curve increases the size of the multiplier effect. a. True b. False

B

When the expenditure schedule is too high, the result is a(n) a. recessionary gap. b. budgetary gap. c. inflationary gap. d. unemployment surplus.

C

If the price level falls, what will happen to the aggregate supply curve? a. It will get flatter. b. It will shift outward. c. It will shift inward. d. Nothing. e. It will get steeper.

D

A common error of business managers is to blame inflation on a. rising interest rates. b. rising wages. c. rising unemployment. d. rising prices. e. consumer spending.

B

The aggregate demand and aggregate supply curve intersect a. at potential GDP. b. at a point which may or may not be equal to potential GDP. c. below potential GDP. d. above potential GDP.

B

The aggregate supply curve is drawn with a. nominal GDP on the vertical axis and real GDP on the horizontal. b. the price level on the vertical axis and real GDP on the horizontal. c. the price level on the vertical axis and nominal GDP on the horizontal. d. real GDP on the horizontal axis and the rate of inflation on the vertical

B

The aggregate supply curve slopes a. downward because firms can sell more at lower prices. b. upward because firms can hire workers at fixed wages for short-run periods. c. downward because firms can hire more workers at lower prices. d. upward because firms want to hire more workers at higher wage levels.

B

The general shape of the aggregate supply curve is a. vertical. b. upward sloping. c. horizontal. d. downward sloping.

B

The money wage rate has little effect on the supply curve. It mainly affects the aggregate demand curve. a. True b. False

B

Which of the diagrams in Figure 10-7 represents a decrease in consumer spending combined with a positive supply shock? a. (C) and (D) b. (A) and (C) c. (B) and (D) d. (A) and (B)

D