Macroeconomics Quiz 32
Prices and wages tend to be: a.) flexible both upward and downward. b.) inflexible both upward and downward. c.) flexible downward, but inflexible upward. d.) flexible upward, but inflexible downward.
D
Efficiency wages are: a.) above-market wages that bring forth so much added work effort that per-unit production costs are lower than at market wages. b.) wage payments necessary to compensate workers for unpleasant or risky work conditions c.) usually less than market wages. d.) relevant to macroeconomics because they explain rightward shifts in aggregate demand.
A
Other things equal, if the national incomes of the major trading partners of the United States were to rise, the U.S.: a.) aggregate demand curve would shift to the right. b.) aggregate supply curve would shift to the left. c.) aggregate supply curve would shift to the right. d.) aggregate demand curve would shift to the left.
A
Which of the following would most likely shift the aggregate demand curve to the right? a.) An increase in stock prices that increases consumer wealth. b.) Increased fear that a recession will cause workers to lose their jobs. c.) An increase in personal income tax rates. d.) A reduction in household borrowing because of tighter lending practices.
A
The aggregate supply curve (short run): a.) graphs as a horizontal line b.) is steeper above the full-employment output than below it. c.) slopes downward and to the right. d.) presumes that changes in wages and other resource prices match changes in the price level.
B
The economy's long-run aggregate supply curve: a.) slopes upward and to the right. b.) is vertical. c.) is horizontal. d.) slopes downward and to the right.
B
Other things equal, appreciation of the dollar: a.) increases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. b.) increases aggregate demand in the United States and may decrease aggregate supply by reducing the prices of imported resources. c.) decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. d.) decreases aggregate demand in the United States and may reduce aggregate supply by increasing the prices of imported resources.
C
The aggregate demand curve: a.) is upsloping because a higher price level is necessary to make production profitable as production costs rise. b.) is downsloping because production costs decline as real output increases. c.) shows the amount of expenditures required to induce the production of each possible level of real output. d.) shows the amount of real output that will be purchased at each possible price level.
D
The real-balances effect indicates that: a.) an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending. b.) a lower price level will decrease the real value of many financial assets and therefore reduce spending. c.) a higher price level will increase the real value of many financial assets and therefore increase spending. d.) a higher price level will decrease the real value of many financial assets and therefore reduce spending.
D