Econ cahp 12

In the diagram, a shift from AS1 to AS3 might be caused by a(n) increase in productivity. increase in the prices of imported resources. decrease in the prices of domestic resources. decrease in business taxes.

increase in the prices of imported resources.

Graphically, cost-push inflation is shown as a leftward shift of the AD curve. rightward shift of the AD curve. rightward shift of the AS curve. leftward shift of the AS curve.

leftward shift of the AS curve.

Which one of the following would not shift the aggregate demand curve? depreciation of the international value of the dollar an increase in personal income tax rates a change in the price level a decline in the interest rate at each possible price level

a change in price level

In the accompanying figure, a shift from AD2 to AD1 would be consistent with what economic event in U.S. history? World War 2 in the 1940s cost-push inflation in the early 1970s demand-pull inflation in the late 1960s the Great Recession of 2007-2009

the Great Recession of 2007-2009

Per-unit production cost is real output divided by inputs. total input cost divided by units of output. a determinant of aggregate demand. units of output divided by total input cost.

total input cost divided by units of output

The shape of the immediate-short-run aggregate supply curve implies that output prices are flexible, but input prices are not. increases in aggregate demand are inflationary. total output depends on the volume of spending. government cannot bring an economy out of a recession by increasing spending.

total output depends on the volume of spending.

Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to an increase in aggregate supply. a price level that is inflexible downward. a multiplier effect. a wealth effect.

a price level that is inflexible downward

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

both input and output prices are fixed.

Other things equal, appreciation of the dollar decreases 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 reduce aggregate supply by increasing the prices of imported resources. increases 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 increase aggregate supply by reducing the prices of imported resources.

The determinants of aggregate demand explain why the aggregate demand curve is downsloping. explain shifts in the aggregate demand curve. include input prices and resource productivity. demonstrate why real output and the price level are inversely related.

explain shifts in the aggregate demand curve

Productivity measures the amount of capital goods used per worker. per-unit production costs. real output per unit of input. the changes in real wealth caused by price level changes.

real output per unit of input.

Graphically, demand-pull inflation is shown as a rightward shift of the AD curve along an upsloping AS curve. leftward shift of the AS curve along an upsloping AD curve. rightward shift of the AD curve along a downsloping AS curve. leftward shift of the AS curve along a downsloping AD curve.

rightward shift of the AD curve along an upsloping AS curve.

An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. The per-unit cost of production in this economy is $0.10. $0.50. $1.00. $0.05.

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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 ______. 3; 2; 1 1; 2; 3 2; 3; 4 1; 2; 4

3; 2; 1

In the diagram, the economy's relevant aggregate demand and immediate-short-run aggregate supply curves, respectively, are lines 2 and 3. 4 and 1. 2 and 4. 4 and 3.

4 & 3

At the current price level, producers supply $375 billion of final goods and services while consumers purchase $355 billion of final goods and services. The price level is: above equilibrium. at equilibrium. below equilibrium. more information is needed.

above equilibrium.

Which of the following would most likely shift the aggregate demand curve to the right? an increase in stock prices that increases consumer wealth increased fear that a recession will cause workers to lose their jobs an increase in personal income tax rates a reduction in household borrowing because of tighter lending practices

an increase in stock prices that increases consumer wealth

The immediate-short-run aggregate supply curve is upsloping. horizontal. downsloping. vertical.

horiziontal