ECON_Practice Assignment #11_Ch. 12 Part 1

The real-balances effect indicates that -an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending. -a lower price level will decrease the real value of many financial assets and therefore reduce spending. -a higher price level will increase the real value of many financial assets and therefore increase spending. -a higher price level will decrease the real value of many financial assets and therefore reduce spending.

a higher price level will decrease the real value of many financial assets and therefore reduce spending.

Other things equal, if the national incomes of the major trading partners of the United States were to rise, the U.S. -aggregate demand curve would shift to the right. -aggregate supply curve would shift to the left. -aggregate supply curve would shift to the right. -aggregate demand curve would shift to the left.

aggregate demand curve would shift to the right.

Which of the following would not shift the aggregate supply curve? -an increase in labor productivity -a decline in the price of imported oil -a decline in business taxes -an increase in the price level

an increase in the price level

The immediate-short-run aggregate supply curve represents circumstances where -both input and output prices are fixed. -both input and output prices are flexible. -input prices are fixed, but output prices are flexible. -input prices are flexible, but output prices are fixed.

both input and output prices are fixed.

Other things equal, appreciation of the dollar -increases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. -increases aggregate demand in the United States and may decrease aggregate supply by reducing the prices of imported resources. -decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. -decreases aggregate demand in the United States and may reduce aggregate supply by increasing the prices of imported resources.

decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources.

The aggregate supply curve -is explained by the interest rate, real-balances, and foreign purchases effects. -gets steeper as the economy moves from the top of the curve to the bottom of the curve. -shows the various amounts of real output that businesses will produce at each price level. -is downsloping because real purchasing power increases as the price level falls.

shows the various amounts of real output that businesses will produce at each price level.

If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes -the output effect. -the foreign purchases effect. -the real-balances effect. -the shift-of-spending effect.

the foreign purchases effect.

In the diagram, the economy's immediate-short-run AS curve is line ______, its short-run AS curve is _____, and its long-run AS curve is line ______. Link to diagram: https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image003ch32a.png 1; 2; 4 1; 2; 3 2; 3; 4 3; 2; 1

3; 2; 1

Which of the following would most likely reduce aggregate demand (shift the AD curve to the left)? -a reduced amount of excess capacity -increased government spending on military equipment -an appreciation of the U.S. dollar -increased consumer optimism regarding future economic conditions

an appreciation of the U.S. dollar

The short-run aggregate supply curve represents circumstances where -both input and output prices are fixed. -both input and output prices are flexible. -input prices are fixed, but output prices are flexible. -input prices are flexible, but output prices are fixed.

input prices are fixed, but output prices are flexible.

In the diagram, a shift from AS3 to AS2 might be caused by an increase in Link to diagram: https://ezto.mheducation.com/extMedia/bne/McConnell%2021e/image007ch32a.png -business taxes and government regulation. -the prices of imported resources. -the prices of domestic resources. -productivity.

productivity