Econ Final Exam Review

Which of the following shifts the AD curve to the right?

1. An increase in the stock market

2. A decrease in real interest rates

3. A decrease in government spending

• 1 only

• 1 and 2

• 1 and 3

• 2 and 3

• 1, 2, and 3

Which of the following shifts the AD curve to the left?

1. Increased likelihood of a recession in the near future

2. A decrease in taxes

3. A decrease in government spending

• 1 only

• 1 and 2

• 1 and 3

• 2 and 3

• 1, 2, and 3

Which of the following shifts the AS curve to the right?

1. Decrease in wages

2. A decrease in taxes

3. A decrease in government spending

• 1 only

• 1 and 2

• 1 and 3

• 2 and 3

• 1, 2, and 3

Which of the following shifts the AS curve to the left?

1. Decrease in productivity

2. A decrease in taxes

3. Higher import prices because of tariffs

• 1 only

• 1 and 2

• 1 and 3

• 2 and 3

• 1, 2, and 3

Which of the following shifts the AS curve to the left?

1. Decrease in subsidies

2. An increase in government regulation

3. Increase in the price of capital goods

• 1 only

• 1 and 2

• 1 and 3

• 2 and 3

• 1, 2, and 3

Which of the following shifts the AD curve to the right?

1. Expectations that the economy will boom in the coming years

2. An improvement in technology

3. High excess capacity

4. An increase in the price of real estate

• 1 only

• 1, 2, and 3

• 1, 3, and 4

• 1 and 2

• 2, 3, and 4

Other things equal, if the national income of the major trading partners of the United States were to rise, the US

• 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

Suppose the consumer spending decreases sharply. Draw how the AD/AS model and show how this change would affect the model graphically. What will be the effect on GDP from this change?

Suppose the consumer spending decreases sharply. Draw how the AD/AS model and show how this change would affect the model graphically. What will be the effect on the Price Level from this change?

Suppose the consumer spending decreases sharply. Draw how the AD/AS model and show how this change would affect the model graphically. What will be the effect on unemployment from this change?