macro chapter 12 quiz

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If the dollar appreciates relative to foreign currencies, then:

Foreign buyers will fund U.S. goods become more expensive

An expected increase in the prices of consumer goods in the near future will:

Increase (or shift right) in aggregate demand now

An increase in productivity will:

Increase aggreagte supply

An increase in expected future income will:

Increase aggregate demand

Refer to the diagram. other things equal, a shift of the aggregate supply curve from AS0 to AS1 might be caused by a(n):

Increase in government regulation

a decrease in interest rates caused by a change in the price level would cause a(n):

Increase in the quantity of real output demanded (or movement down along AD)

if congress passed new laws significantly increasing the regulation of business, this action would tend to:

Increase per-unit production costs and shift the aggregate supply curve to the left

the economy experiences an increase in the price level and a decrease in real domestic output. which of the following is a likely explanation?

Input prices have increased

Graphically, cost-push inflation is shown as a:

Leftward shift on the AS curve.

The real-balances effect on aggregate demand suggests that a:

Lower price level will increase the real value of many financial assets and therefore cause an increase in spending

A fall in labor costs will cause aggregate:

Supply to increase

A change in business taxes and regulation can affect production costs and aggregate supply.

True

when the economy is experiencing demand-pull inflation, its real GDP tends to be rising.

True

wage contracts, efficiency wages, and the minimum wage are explanations for why:

Wages tend to be inlfexible downward

In the diagram, a shift from AS1 to AS3 might be caused by a(n):

increase in the prices of imported rescources

In the diagram, a shift from AS3 to AS2 might be cuased by and increase in:

productivity

The fear of unwanted price wars may explain why many firms are reluctant to:

reduce prices when a decline in aggregate demand occurs.

Answer the question based on the following list of factors that are related to the aggregate demand cure. 1. Real-Balances effect 2. household expectations 3. interest-rate effect 4. personal income tax rates 5. profit expectations 6. national income abroad 7. government spending 8. foreign purchases effect 9. exchange rates 10. degree of excess capacity which of the above factors best explain the downward slope of aggreagte demand curve?

1, 3, and 8

Answer the question on the basis of the following aggregate demand and supply schedules for a hypothetical economy Refer to the data. The equilibrium price level will be:

200

A sharp rise in the real value of stock prices, which is independent of a change in the price level, would best be an example of:

A change in real value of consumer wealth

The foreign purchases, interest rate, and real-balances effects explain why the:

Aggregate demand curve is downward-sloping

if the dollar appreciates in value relative to foreign currencies:

Aggregate demand decreases becuase net exports decrease.

which combination of factors would most likely increase aggreagate demand?

An increase in consumer wealth and a decrease in interest rates

which of the diagrams best portrays the effects of an increase in foreign spending on U.S. products?

C.

which of the diagrams best portrays the effects of declines in the incomes of U.S. trading partners

D.

If the U.S. dollar appreciates in value relative to foreign currencies, then this will:

Decrease aggregate demand and increase aggregate supply

refer to the data. if the amount of real output demanded at each price lever falls by $200, this might have been caused by:

a worsening of business expectations.

Minimum wage laws tend to make the price level more flexible rather than less flexible.

false


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