Aggregate Supply dr. manner

Contrast a positive supply shock with a negative supply shock. a. A positive supply shock increases short-run aggregate supply, whereas a negative supply shock decreases short-run aggregate supply. b. A positive supply shock is an expected event, whereas a negative supply shock is an unexpected event. c. A positive supply shock is permanent, whereas a negative supply shock is temporary. d. A positive supply shock causes the short-run aggregate supply curve to shift leftward, whereas a negative supply shock causes the short-run aggregate supply curve to shift rightward.

A. A positive supply shock increases short-run aggregate supply, whereas a negative supply shock decreases short-run aggregate supply.

Which of the following events could account for the situation shown? A. an increase in natural resources b. a change in the expected price level c. an increase in government regulations d. a temporary decrease in an input price

A. an increase in natural resources

Movement along the curve from point A to point B represents a change in ______ in response to price level changes. a. wages b. output c. input d. rents

B. output

An aggregate supply curve indicates the quantities of real GDP supplied at different ______ levels. a. interest rate b. wage c.price d.stock market

C. Price

When the overall price level decreases, what is the effect on the economy? Group of answer choicesThere is an increase in the quantity of real GDP that producers are willing and able to supply.Producers are willing and able to supply less real output.Movement occurs along the short-run aggregate supply curve from point A to point B.The short-run aggregate supply curve shifts leftward.

Producers are willing and able to supply less real output.

Which of the following examples, ceteris paribus, is most likely to cause a rightward shift in that nation's long-run aggregate supply curve? The United Kingdom experiences a decline in labor productivity. The French government increases government regulations on business. The price of oil temporarily declines in the United States. The Netherlands experiences an increase in its stock of capital.

The Netherlands experiences an increase in its stock of capital

Which of the following examples, ceteris paribus, is most likely to cause a leftward shift in that nation's long-run aggregate supply curve? Group of answer choicesCanada reduces government regulations on businesses.Mexico experiences 10 years of favorable weather conditions.The United States lowers its retirement age by 10 years.Norway increases access to on-the-job training programs.

The United States lowers its retirement age by 10 years.

Which of the following statements accurately describes the situation shown? Group of answer choicesa movement along the short-run aggregate supply curve and an upward shift in the long-run aggregate supply curvea rightward shift in the short-run aggregate supply curve and a rightward shift in the long-run aggregate supply curvea movement along the long-run aggregate supply curve and no change in the short-run aggregate supply curvea leftward shift in the long-run aggregate supply curve and a rightward shift in the short-run aggregate supply curve

a rightward shift in the short-run aggregate supply curve and a rightward shift in the long-run aggregate supply curve

The natural rate of real output reflects the levels of ______ in the economy. a. capital, land, labor, and technology b. prices c. consumption, investment, imports, and taxes d. wages

a. capital, land, labor, and technology

The short-run aggregate supply curve ______. slopes upward is perfectly vertical slopes downward is perfectly horizontal

a. slopes upward

Which of the following is an example of a positive supply shock? Group of answer choicesan unexpected labor strikea major widespread forest firean unexpected price cut in imported oila decrease in the overall price level

an unexpected price cut in imported oil

Assume that movement from point A to point B represents a 15 percent change in the price of goods and services. What would be the corresponding change in the price of inputs? a no change b 15 percent increase c 15 percent decrease d 100 percent increase

b 15 percent increase

Changes in which set of factors can shift both the short-run aggregate supply curve and the long-run aggregate supply curve? a. wages, non-labor inputs, expected price levels, and supply shocks b. capital, land, labor, technology, and government regulations c. sticky wages, other input prices, menu costs, and sticky prices d. price levels, input prices, output prices, and sticky prices

b. capital, land, labor, technology, and government regulations

This curve shows there is a(n) ______ relationship between the quantity of real GDP supplied and the overall price level. a. neutral b. positive c. inverse d. complementary

b. positive

Which of the following accurately explains a difference between the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve? a. The LRAS curve reflects constant input prices with adjustable output prices, whereas the SRAS curve reflects adjustable input and output prices. b. The LRAS curve reflects constant output prices with adjustable input prices, whereas the SRAS curve reflect constant output prices. c. The SRAS curve reflects constant input prices with adjustable output prices, whereas the LRAS curve reflects adjustable input and output prices. d. The SRAS curve reflects constant output prices with adjustable input prices, whereas the LRAS curve reflects constant input and output prices.

c. The SRAS curve reflects constant input prices with adjustable output prices, whereas the LRAS curve reflects adjustable input and output prices.

Which of the following examples, ceteris paribus, best describes the situation shown? a. Output is permanently changed as a result of the increase in input prices. b. Input prices are both temporarily and permanently increased. c. There are no permanent changes in input supply associated with the increase in input prices. d. The increase in input prices is accompanied by an increase in the labor force.

c. There are no permanent changes in input supply associated with the increase in input prices.

The level of long-run real GDP that producers are willing and able to supply ______. a. varies inversely with the price level b. increases with increasing price level c. is not affected by changes in the price level d. decreases with increasing price level

c. is not affected by changes in the price level

When the price level changes from PL2 to PL1, what happens to the quantity of real GDP that suppliers are willing and able to supply? It increases from RGDP2 to RGDP1. It increases from RGDP1 to RGDP2. It decreases from RGDP1 to RGDP2. It decreases from RGDP2 to RGDP1.

d. It decreases from RGDP2 to RGDP1.

How did the entry of women and baby boomers into the U.S. labor force during the 1960s affect the nation's short-run aggregate supply (SRAS) curve and long-run aggregate supply (LRAS) curve? a. The SRAS curve and LRAS curve both shifted to the left. b. The SRAS curve shifted rightward, and the LRAS curve shifted leftward. c. The SRAS curve shifted leftward, and the LRAS curve shifted rightward. d. The SRAS curve and LRAS curve both shifted to the right.

d. The SRAS curve and LRAS curve both shifted to the right.

Assume the overall price level changes, ceteris paribus. Considering this, which of the following accurately explains a difference between the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve? Group of answer choicesThere is movement along the SRAS curve but not the LRAS curve.The quantity of real GDP supplied changes for the LRAS curve but not for the SRAS curve.Both the SRAS curve and the LRAS curve shift.The quantity of real GDP supplied changes for the SRAS curve but not for the LRAS curve.

d. The quantity of real GDP supplied changes for the SRAS curve but not for the LRAS curve.

An increase in short-run aggregate supply shifts the curve ______. a. from SRAS2 to SRAS1 b. from LRAS2 to SRAS1 c. from SRAS1 to LRAS1 d. from SRAS1 to SRAS2

d. from SRAS1 to SRAS2

The long-run aggregate supply curve ______. a.has the same slope as the short-run b.aggregate supply curve has the same slope as the short-run aggregate demand curve c.is perfectly horizontal at the minimum price level in the economy d. is perfectly vertical at the natural rate of output in an economy

d. is perfectly vertical at the natural rate of output in an economy

Assume that movement from point A to point B represents a 25 percent change in the price level. What would be the corresponding short-run change in the price of inputs? a. 100 percent b. 50 percent c. 25 percent d. no change

d. no change

An increase in natural resources would presumably ______ the costs of production and ______ the economy's sustainable rate of output. Group of answer choicesdecrease; increasedecrease; decreaseincrease; increaseincrease; decrease

decrease; increase

The position of the long-run aggregate supply curve is determined by the ______. maximum price level in the economy short-run aggregate supply curve natural rate of real output long-run aggregate demand curve

natural rate of real output

Which of the following examples, ceteris paribus, would most likely cause rightward movement of the short-run aggregate supply curve for that economy? The price level in Norway increases over several years. Production costs increase in Mexico due to increased government regulation. Deflation in the United States pushes down the price level. Labor productivity declines in Canada after nominal wages also decline.

the price level in Norway increases over several years

What determines the ability of these factors to shift the short-run aggregate supply curve, to shift the long-run aggregate supply curve, or to shift both curves? whether or not the effects cause changes in the overall price level whether the effects are temporary or permanent whether or not producers are fooled by the misperception effect whether the effects are positive or negative

whether the effects are temporary or permanent