Question 1

Figure 33-5  ​
-Refer to Figure 33-5. If the economy starts at Point Y, then a recession occurs at

Accepted Answer

A)  Point V.
B)  Point W.
C)  Point X.
D)  Point Z.

Question 2

A recession with inflation is know by what term?

Accepted Answer

The answer of A recession with inflation is know by...

Question 3

"Money is a veil" best describes

Accepted Answer

A)  the general view of the economy.
B)  the historical view of the economy.
C)  classical view of the economy.
D)  economy in the short run but not the long run.

Question 4

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Accepted Answer

A) True 
 B)False

Question 5

Figure 33-6 1 and Y1. B) P1 and Y3. C) P3 and Y1. D) P3 and Y3." class="answers-bank-image d-inline" rel="preload" > ​
-Refer to Figure 33-6. Suppose the economy starts at A. Stagflation would be consistent with the move to

Accepted Answer

A)  P1 and Y1.
B)  P1 and Y3.
C)  P3 and Y1.
D)  P3 and Y3.

Question 6

What do most economists believe concerning the relation between the price level and real output?

Accepted Answer

Most economists believe that in the long run, real variables are not affected by nominal variables. So, for example, changes in the money supply do not change real variables in the long run. However, most economists believe that nominal variables do change real variables in the short run. In the short-run prices and wages may be fixed based on the expected price level. If the actual price level differs from the expected price level, real variables are affected.

Question 7

Figure 33-11
​  ​
-Refer to Figure 33-11. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Accepted Answer

consumption, investm...

Question 8

If aggregate demand and aggregate supply both shift right, we can be sure that the price level is higher in the short run.

Accepted Answer

A) True 
 B)False

Question 9

Briefly state the three key facts about economic fluctuations.

Accepted Answer

(1) Economic fluctuations are ...

Question 10

Suppose people anticipate an increase in the expected price level. Which curve(s) in the aggregate demand and aggregate supply model would be affected, and which way would it (they) shift?

Accepted Answer

The short-run aggregate-supply curve would shift to the left.

Question 11

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

Accepted Answer

The aggreg...

Question 12

Scenario 33-2
Imagine that in the current year the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time.
-Refer to Scenario 33-2. In the long run, what happens to the expected price level and what impact does this have on wage bargaining?

Accepted Answer

A)  The expected price level falls.New wage contracts are negotiated at higher wages.
B)  The expected price level falls.New wage contracts are negotiated at lower wages.
C)  The expected price level rises.New wage contracts are negotiated at higher wages.
D)  The expected price level rises.New wage contracts are negotiated at lower wages.

Question 13

Figure 33-4 3 B) LRAS2 C) LRAS1 D) Both LRAS3 and LRAS1" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 33-4. The short-run equilibrium is defined by the given AD and SRAS curves. Which of the long-run aggregate-supply curves is consistent with a short-run economic a recession?

Accepted Answer

A)  LRAS3
B)  LRAS2
C)  LRAS1
D)  Both LRAS3 and LRAS1

Question 14

Figure 33-3 2 to SRAS1 A) could be caused by a decrease in the expected price level. B) could be caused by an outbreak of war in the Middle East. C) causes the economy to experience a decrease in the unemployment rate. D) causes the economy to experience a drop in the price level." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 33-3. The shift of the short-run aggregate-supply curve from SRAS2 to SRAS1

Accepted Answer

A)  could be caused by a decrease in the expected price level.
B)  could be caused by an outbreak of war in the Middle East.
C)  causes the economy to experience a decrease in the unemployment rate.
D)  causes the economy to experience a drop in the price level.

Question 15

Other things the same, technological progress raises the price level.

Accepted Answer

A) True 
 B)False

Question 16

Figure 33-1 1. B) Y2. C) Y3. D) both Y1 and Y3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 33-1. The natural level of output occurs at

Accepted Answer

A)  Y1.
B)  Y2.
C)  Y3.
D)  both Y1 and Y3.

Question 17

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

Accepted Answer

A)  low and so supply a smaller quantity of labor.
B)  low and so supply a larger quantity of labor.
C)  high and so supply a smaller quantity of labor.
D)  high and so supply a larger quantity of labor.

Question 18

An increase in the actual price level does not shift the short-run aggregate supply curve, but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 19

From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate

Accepted Answer

A)  demand right.
B)  demand left.
C)  supply right.
D)  supply left.

Question 20

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

Accepted Answer

A)  the slope of short-run aggregate supply.
B)  the slope of long-run aggregate supply.
C)  the slope of the aggregate-demand curve.
D)  shifts in the aggregate-demand curve. C

Exam 33: Aggregate Demand and Aggregate Supply

Figure 33-5 -Refer to Figure 33-5. If the economy starts at Point Y, then a recession occurs at

Correct Answer
verified

A recession with inflation is know by what term?

Correct Answer
verified

"Money is a veil" best describes

Correct Answer
verified

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Correct Answer
verified

Figure 33-6 -Refer to Figure 33-6. Suppose the economy starts at A. Stagflation would be consistent with the move to

Correct Answer
verified

What do most economists believe concerning the relation between the price level and real output?

Figure 33-11 -Refer to Figure 33-11. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Correct Answer
verified
consumption, investm...
View Answer

If aggregate demand and aggregate supply both shift right, we can be sure that the price level is higher in the short run.

Correct Answer
verified

Briefly state the three key facts about economic fluctuations.

Correct Answer
verified
(1) Economic fluctuations are ...
View Answer

Suppose people anticipate an increase in the expected price level. Which curve(s) in the aggregate demand and aggregate supply model would be affected, and which way would it (they) shift?

Correct Answer
verified
The short-run aggregate-supply curve would shift to the left.

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

Correct Answer
verified
The aggreg...
View Answer

Scenario 33-2 Imagine that in the current year the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. -Refer to Scenario 33-2. In the long run, what happens to the expected price level and what impact does this have on wage bargaining?

Correct Answer
verified

Figure 33-4 -Refer to Figure 33-4. The short-run equilibrium is defined by the given AD and SRAS curves. Which of the long-run aggregate-supply curves is consistent with a short-run economic a recession?

Correct Answer
verified

Figure 33-3 -Refer to Figure 33-3. The shift of the short-run aggregate-supply curve from SRAS₂ to SRAS₁

Correct Answer
verified

Other things the same, technological progress raises the price level.

Correct Answer
verified

Figure 33-1 -Refer to Figure 33-1. The natural level of output occurs at

Correct Answer
verified

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

Correct Answer
verified

An increase in the actual price level does not shift the short-run aggregate supply curve, but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

Correct Answer
verified

From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate

Correct Answer
verified

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

Correct Answer
verified
C

Exam 33: Aggregate Demand and Aggregate Supply

Figure 33-5 ​ -Refer to Figure 33-5. If the economy starts at Point Y, then a recession occurs at

Correct AnswerverifiedShow Answer

A recession with inflation is know by what term?

Correct AnswerverifiedShow Answer

"Money is a veil" best describes

Correct AnswerverifiedShow Answer

All explanations for the upward slope of the short-run aggregate supply curve suppose that the quantity of output supplied increases when the actual price level exceeds the expected price level.

Correct AnswerverifiedShow Answer

Figure 33-6 ​ -Refer to Figure 33-6. Suppose the economy starts at A. Stagflation would be consistent with the move to

Correct AnswerverifiedShow Answer

What do most economists believe concerning the relation between the price level and real output?

Figure 33-11 ​ ​ -Refer to Figure 33-11. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Correct Answerverifiedconsumption, investm...View AnswerShow Answer

If aggregate demand and aggregate supply both shift right, we can be sure that the price level is higher in the short run.

Correct AnswerverifiedShow Answer

Briefly state the three key facts about economic fluctuations.

Correct Answerverified(1) Economic fluctuations are ...View AnswerShow Answer

Suppose people anticipate an increase in the expected price level. Which curve(s) in the aggregate demand and aggregate supply model would be affected, and which way would it (they) shift?

Correct AnswerverifiedThe short-run aggregate-supply curve would shift to the left.

What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?

Correct AnswerverifiedThe aggreg...View AnswerShow Answer

Scenario 33-2 Imagine that in the current year the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. -Refer to Scenario 33-2. In the long run, what happens to the expected price level and what impact does this have on wage bargaining?

Correct AnswerverifiedShow Answer

Figure 33-4 -Refer to Figure 33-4. The short-run equilibrium is defined by the given AD and SRAS curves. Which of the long-run aggregate-supply curves is consistent with a short-run economic a recession?

Correct AnswerverifiedShow Answer

Figure 33-3 -Refer to Figure 33-3. The shift of the short-run aggregate-supply curve from SRAS2 to SRAS1

Correct AnswerverifiedShow Answer

Other things the same, technological progress raises the price level.

Correct AnswerverifiedShow Answer

Figure 33-1 -Refer to Figure 33-1. The natural level of output occurs at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An increase in the actual price level does not shift the short-run aggregate supply curve, but an expected increase in the price level shifts the short-run aggregate supply curve to the left.

Correct AnswerverifiedShow Answer

From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made homeowners feel wealthier, then it would have shifted aggregate

Correct AnswerverifiedShow Answer

The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for

Correct AnswerverifiedC

Figure 33-5 -Refer to Figure 33-5. If the economy starts at Point Y, then a recession occurs at

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 33-6 -Refer to Figure 33-6. Suppose the economy starts at A. Stagflation would be consistent with the move to

Correct Answer
verified

Figure 33-11 -Refer to Figure 33-11. Suppose the economy begins at point A. Decreases in what four variables could result in a movement to point D?

Correct Answer
verified
consumption, investm...
View Answer

Correct Answer
verified

Correct Answer
verified
(1) Economic fluctuations are ...
View Answer

Correct Answer
verified
The short-run aggregate-supply curve would shift to the left.

Correct Answer
verified
The aggreg...
View Answer

Correct Answer
verified

Correct Answer
verified

Figure 33-3 -Refer to Figure 33-3. The shift of the short-run aggregate-supply curve from SRAS₂ to SRAS₁

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C