Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

temporarily low and so supply a smaller quantity of labor.

temporarily high and so supply a smaller quantity of labor.

temporarily high and so supply a larger quantity of labor.

temporarily low and so supply a larger quantity of labor.

Suppose the economy is in long-run equilibrium. Concerns about pollution cause the government to significantly restrict the production of electricity. At the same time, taxes fall. In the short-run

the price level will rise, and real GDP might rise, fall, or stay the same.

the price level will fall, and real GDP might rise, fall, or stay the same.

real GDP will fall, and the price level might rise, fall, or stay the same.

real GDP will rise, and the price level might rise, fall, or stay the same.

Which of the following will both make people buy more?

wealth rises and interest rates fall.

wealth and interest rates rise.

wealth falls and interest rates fall.

wealth falls and interest rates rise.

Which of the following shifts short-run aggregate supply right?

an increase in immigration from abroad

an increase in the actual price level

an increase in the minimum wage

an increase in the price of oil

Which of the following is correct concerning recessions?

They tend to be associated with rising unemployment rates.

They are any period when real GDP growth is less than average.

They are associated with comparatively large increases in investment spending.

They come at fairly regular and predictable intervals.

Suppose the economy is in long-run equilibrium. If there is an increase in the supply of labor as well as an increase in the money supply, then we would expect that in the short-run,

real GDP will rise and the price level might rise, fall, or stay the same.

real GDP will fall and the price level might rise, fall, or stay the same.

the price level will rise, and real GDP might rise, fall, or stay the same.

the price level will fall, and real GDP might rise, fall, or stay the same.

Starting from point B and assuming that aggregate demand is held constant, in the long run the economy is likely to experience

a rising price level and a falling level of output, as the economy moves to point A.

a falling price level and a falling level of output, as the economy moves to point C.

a falling price level and a rising level of output, as the economy moves to point A.

a rising price level and a rising level of output, as the economy moves to point C.

Which of the following shifts short-run aggregate supply left?

an increase in price expectations

an increase in the actual price level

As the price level falls,

the exchange rate falls, so net exports rise.

the exchange rate rises, so net exports fall.

the exchange rate falls, so net exports fall.

the exchange rate rises, so net exports rise.

The misperceptions theory of the short-run aggregate supply curve says that the quantity of output supplied will increase if the price level

increases by more than expected so that firms believe the relative price of their output has increased.

increases by less than expected so that firms believe the relative price of their output has decreased.

increases by more than expected so that firms believe the relative price of their output has decreased.

increases by less than expected so that firms believe the relative price of their output has increased.

When the price level falls

people want to hold more money.

Which of the following is correct?

Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.

Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.

Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy.

Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with a much accuracy.

The aggregate supply curve is

vertical in the long run and slopes upward in the short run.

upward sloping in the long run and vertical in the short run.

upward sloping in the short run and in the long run.

vertical in the short run and in the long run.

Suppose that there is an increase in the costs of production that shifts the short-run aggregate supply curve left. If there is no policy response, then eventually

because unemployment is high, wages will be bid down and short-run aggregate supply will shift right.

because unemployment is low, wages will be bid down and short-run aggregate supply will shift right.

because unemployment is low, wages will be bid up and short-run aggregate supply will shift right.

because unemployment is high, wages will be bid up and short-run aggregate supply will shift right.

When looking at a graph of aggregate demand, which of the following is correct?

The variable on the vertical axis is nominal; the variable on the horizontal axis is real

The variable on the vertical axis is real; the variable on the horizontal axis is nominal

There are nominal variables on both the vertical and the horizontal axes.

There are real variables on both the vertical and horizontal axes.

The long-run aggregate supply curve would shift right if the government were to

raise taxes on investment spending.

make unemployment benefits more generous.

Many macroeconomic variables

fluctuate together and by different amounts.

fluctuate together by the same amounts.

fluctuate together about half of the time and by the same amount.

Suppose the economy is in long-run equilibrium. If there is a sharp decline in government purchases combined with a significant increase in immigration of skilled workers, then in the short run,

the price level will fall, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall

real GDP will rise and the price level might rise, fall, or stay the same. In the long-run, real GDP will rise and the price level might rise, fall, or stay the same.

the price level will rise, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall.

the price level will fall, and real GDP might rise, fall, or stay the same. In the long-run, real GDP and the price level will be unaffected.

Other things the same , when the price level falls, interest rates

fall, which means consumers will want to spend more on homebuilding.

rise, which means consumers will want to spend more on homebuilding.

rise, which means consumers will want to spend less on homebuilding.

fall, which means consumers will want to spend less on homebuilding.

An increase in household saving causes consumption to

fall and aggregate demand to decrease.

rise and aggregate demand to decrease.

rise and aggregate demand to increase.

fall and aggregate demand to increase.

Which of the following is not a determinant of the long-run level of real GDP?

available stock of human capital.

the amount of capital used by firms.

Which of the following is correct?

Spending, income, and production do not fluctuate closely with real GDP.

Recessions have never occurred very close together.

Economic fluctuations are easily predicted by competent economists.

Wages tend to be sticky

because of contracts, social norms, and notions of fairness.

because of social norms and notions of fairness, but not contracts.

because of contracts, but not social norms or notions of fairness.

During recessions which type of spending falls?

neither consumption nor investment

Aggregate demand shifts right if

government purchases increase and shifts left if stock prices fall.

government purchases increase and shifts left if stock prices rise.

government purchases decrease and shifts left is stock prices fall.

government purchases decrease and shifts left if stock prices rise.

Which of the following would cause prices to rise and real GDP to fall in the short run?

an increase in the money supply.

an increase in the expected price level.

an increase in the capital stock.

The aggregate demand and aggregate supply graph has

the price level on the vertical axis. The price level can be measured by the GDP deflator.

the price level on the horizontal axis. The price level can be measured by the GDP deflator.

the price level on the vertical axis. The price level can be measured by GDP.

the price level on the horizontal axis. The price level can be measured by real GDP.

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,

relative to prices wages are higher and employment falls.

relative to prices wages are lower and employment falls.

relative to prices wages are lower and employment rises.

relative to prices wages are higher and employment rise.

Which of the following affected aggregate demand during the recession of 2008-2009?

a decline in residential construction and a decrease in lending

a decrease in lending but not a decline in residential construction

neither a decrease in residential construction nor a decrease in lending

a decline in residential construction but not a decrease in lending

A decrease in the expected price level shifts

only the short-run aggregate supply curve right.

both the short-run and the long-run aggregate supply curve right.

Neither the short-run nor the long-run aggregate supply curve right.

only the long-run aggregate supply curve right.

When production costs rise,

the short-run aggregate supply curve shifts to the left.

the aggregate demand curve shifts to the left.

the aggregate demand curve shifts to the right.

the short-run aggregate supply curve shifts to the right.

Other things the same, the aggregate quantity of output supplied will increase if the price level

is higher than expected so that firms believe the relative price of their output has increased.

is higher than expected so that firms believe the relative price of their output has decreased.

is lower than expected so that firms believe the relative price of their output has increased.

is lower than expected so that firms believe the relative price of their output has decreased.

Quiz 5: ASAD

Authored by Nghi Ngô Trần Xuân

Business

University

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When the Fed buys bonds

the supply of money increases and so aggregate demand shifts right.

the supply of money increases and so aggregate demand shifts left.

the supply of money decreases and so aggregate demand shifts left.

the supply of money decreases and so aggregate demand shifts right.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a long-run change

in output, but not the price level.

in the price level, but not output.

in neither the price level nor output.

in the price level and output.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

During a recession, unemployment

is frictional unemployment minus structural unemployment.

decreases.

increases.

is equal to the natural rate of unemployment.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Other things the same, when the price level rises, interest rates

rise, so firms decrease investment.

fall, so firms increase investment.

rise, so firms increase investment.

fall, so firms decrease investment.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose the economy starts at Z. Stagflation would be consistent with the move to

P₁ and Y₃ .

P₁ and Y₁ .

P₃ and Y₃ .

P₃ and Y₁ .

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The price level rises in the short run if

aggregate demand shifts left or aggregate supply shifts right.

aggregate demand or aggregate supply shifts right.

aggregate demand shifts right or aggregate supply shifts left.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following rises during recessions?

neither layoffs nor consumer spending

consumer spending but not layoffs

layoffs but not consumer spending

layoffs and consumer spending

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Quiz 5: ASAD

When the Fed buys bonds

The long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a long-run change

During a recession, unemployment ​

Other things the same, when the price level rises, interest rates

Suppose the economy starts at Z. Stagflation would be consistent with the move to

The price level rises in the short run if

Which of the following rises during recessions?

Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

Suppose the economy is in long-run equilibrium. Concerns about pollution cause the government to significantly restrict the production of electricity. At the same time, taxes fall. In the short-run

Which of the following will both make people buy more?

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During a recession, unemployment