Exam 11: Aggregate Supply

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A) businesses cut back production
B) the potential output level decreases
C) initially,the short-run aggregate supply curve shifts leftward; later,there is a downward movement along that curve
D) initially,the short-run aggregate supply curve shifts leftward; later,there is an upward movement along that curve
E) an expansionary gap develops

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A) an increase in business taxes
B) an increase in gasoline taxes
C) an increase in the cost of raw materials
D) an increase in the amount and cost of government regulation
E) an increase in agricultural output

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A) real wage equals the nominal wage
B) price level is constant
C) expected real wage equals the inflation rate
D) expected price level equals the unemployment rate
E) expected price level equals the actual price level

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A) firms will find production more profitable than they had expected and will increase the quantity of output supplied
B) firms will find production less profitable than they had expected and will decrease the quantity of output supplied
C) firms,because they are making less profit than they had expected,will increase the quantity of output supplied
D) resource owners,because they are making a lower profit than they had expected,will decrease the quantity of output supplied
E) unemployment will increase

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A) falls by 2 percent
B) falls by 10 percent
C) rises by 2 percent
D) rises by 10 percent
E) remains constant

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A) increase production in the short run
B) decrease production in the short run
C) maintain production in the short run but increase prices
D) maintain production in the short run but decrease prices
E) decrease production and lower prices in the short run

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A) decrease in price and output levels
B) increase in price and output levels
C) increase in the price level and a decrease in output
D) decrease in the price level and an increase in output
E) decrease in the price level and no change in output

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A) inflation and unemployment
B) inflation and real GDP
C) the actual price level and aggregate quantity supplied
D) the actual price level and unemployment
E) the actual price level and consumption spending

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A) long-run and short-run aggregate supply curves inward
B) short-run aggregate supply curve inward and the long-run aggregate supply curve outward
C) short-run aggregate supply curve outward but not the long-run aggregate supply curve
D) long-run aggregate supply curve inward but not the short-run aggregate supply curve
E) long-run and short-run aggregate supply curves outward

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A) increases in the price level
B) decreases in the price level
C) outward shifts of the aggregate demand and supply curves
D) a leftward shift of the aggregate demand curve along a vertical aggregate supply curve
E) an increase in the potential level of real GDP

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A) firms' and workers' expectations about the price level are realized
B) the actual price level is higher than workers expected
C) firms and workers have the same expectations about the price level
D) the actual price level remains constant
E) the actual price level is higher than firms expected

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A) a
B) b
C) c
D) d
E) e

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A) The nominal wage will be constant only if the inflation rate is constant.
B) The real wage will be constant only if the inflation rate is constant.
C) Changes in the nominal wage will be the same as changes in the real wage only if the price level is constant.
D) The real wage will be constant only if the price level is constant.
E) The real wage will be constant only if the nominal wage is constant.

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A) quantity of goods and services a worker can purchase in exchange for work time
B) dollar value of the goods and services a worker can purchase in exchange for working
C) nominal wage minus taxes paid on wages
D) actual amount of income a worker receives after deductions for such things as taxes,insurance,and the like
E) nominal wage times the price level

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A) the quantity of goods and services a worker can purchase in exchange for work time
B) the dollar value of the goods and services a worker can purchase in exchange for work time
C) real wages minus taxes paid on wages
D) the most accurate measure for comparing employee standard of living across time
E) real wages divided by the price level

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A) whenever money in circulation is decreased
B) whenever gross investment is positive
C) whenever gross investment is negative
D) only if net investment is positive
E) whenever gross investment is zero

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A) The short-run aggregate supply curve shifts leftward and the long-run supply curve shifts rightward.
B) The short-run aggregate supply curve shifts rightward and the long-run supply curve shifts rightward.
C) The short-run aggregate supply curve does not shift and the long-run aggregate supply curve shifts rightward.
D) The short-run aggregate supply curve shifts rightward but the long-run aggregate supply curve does not shift.
E) There will be a movement to the left along the aggregate demand curve.

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