Macroeconomics Quiz

Which of the following best describes the short run aggregate supply curve?

• The amount buyers plan to spend on output

• A curve showing the relationship between inputs and outputs

• A curve showing the trade-off between inflation and unemployment

• A curve indicating the level of real output that will be purchased at each possible price level

• A curve indicating the level of real output that will be produced at each possible price level

A change in which of the following will cause the aggregate demand curve to shift?

• Energy prices

• Productivity rates

• Consumer income

• Prices of inputs

• Prices of consumer goods

The short-run aggregate supply curve will shift to the right when

• energy prices increase

• government regulation increases

• prices of inputs decrease

• investment spending decreases

• productivity rates decrease

A rightward shift in the aggregate demand curve will cause employment and the price level to change in which of the following ways in the short run?

• Increase in Employment; Increase in Price Level

• Increase in Employment; Decrease in Price Level

• Increase in Employment; No Change in Price Level

• Decrease in Employment; Increase in Price Level

• No Change in Employment; No Change in Price Level

In the long run, an increase in the capital stock will cause the

• aggregate demand curve to shift left

• aggregate demand to shift right

• production possibilities curve to shift in.

• aggregate supply curve to shift left.

• long-run aggregate supply curve to shift right.

Which of the following will increase aggregate demand?

• A decrease in personal income taxes

• A decrease in government spending

• An increase in corporate income taxes

• A decrease in the capital stock

• An increase in interest rates

An increase in labor productivity would most likely cause real gross domestic product and the price level to change in which of the following ways?

• Increase in Real GDP; Increase in Price Level

• Increase in Real GDP; Decrease in Price Level

• Increase in Real GDP; No Change in Price Level

• Decrease in Real GDP; Increase in Price Level

• Decrease in Real GDP; No Change in Price Level

If Maria's disposable income increases from $600 to $650 and her level of personal consumption expenditures increases from $480 to $520, you may conclude that her marginal propensity to

• consume is 0.8

• consume is 0.4

• consume is 0.25

• save is 0.8

• save is 0.25

Which effect describes the fact that when the price level increases, the interest rate increases and investment spending decreases?

• Interest rate effect

• Net export effect

• Pareto effect

• Substitution effect

• Real balance effect

The change in real GDP that occurs when an increase in the price level leads to a change in the relative prices of imports and exports is a result of the

• Interest rate effect

• exchange rate effect

• Pareto effect

• substitution effect

• real balance effect