Macro- Quizzes for Exam 1

Refer to the above diagram. A price of $60 in this market will result in

Review math of surplus and shortage answer is surplus of 100 U

Which of the following would not shift the aggregate supply curve?

an increase in the price level

An increase in the quantity demanded means that

price has declined and consumers therefore want to purchase more of the product.

The aggregate expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate expenditures model:

the level of aggregate expenditures and therefore the level of real GDP vary inversely with the price level.

In moving along a stable supply curve which of the following is not held constant?

the price of the product for which the supply curve is relevant

Answer the next question(s) on the basis of the following information. The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information. If demand changed from P = 10 - .2Q to P = 7 - .3Q, the new equilibrium price is:

$4

In the following question(s) you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X. Refer to the above. A decrease in the number of consumers of product X will

decrease <i>D</i>, decrease <i>P</i>, and decrease <i>Q</i>.

Cost-push inflation is depicted as a rightward shift of the aggregate demand curve along an upsloping aggregate supply curve.

false

The shape of the aggregate supply curve is determined by what happens to aggregate demand as real output expands.

false

A rightward shift of the AD curve in the very steep upper part of the upsloping AS curve will:

increase the price level by more than real output.

Price ceilings and floors

interfere with the rationing function of prices.

Graphically, cost-push inflation is shown as a

leftward shift of AS curve.