23 Jul WHICH OF THE FOLLOWING IS NOT A DETERMINANT OF THE LONG-RUN LEVEL OF REAL GDP?
AS-AD ____ 1. Which of the following is not a determinant of the long-run level of real GDP? Show more AS-AD ____ 1. Which of the following is not a determinant of the long-run level of real GDP? a. the price level b. the supply of labor c. available natural resources d. available technology Consider the exhibit below for the following questions. Figure 33-1 ____ 2. Refer to Figure 33-1. If the economy is at A and there is a fall in aggregate demand in the short run the economy a. stays at A. b. moves to B. c. moves to C. d. moves to D. ____ 3. Keynes explained that recessions and depressions occur because of a. excess aggregate demand. b. inadequate aggregate demand. c. excess aggregate supply. d. inadequate aggregate supply. ____ 4. In 2009 Congress passed legislation providing states with funds to build roads and bridges. It also instituted tax cuts. Which of these shifts aggregate demand right? a. only the increased funding for states b. only the tax cuts c. both the increased funding for states and the tax cuts d. neither the increased funding for states nor the tax cuts ____ 5. Which of the following shifts long-run aggregate supply right? a. an increase in either the physical or human capital stock b. an increase in the human but not the physical capital stock c. an increase in the physical capital stock but no the human capital stock d. neither an increase in the physical capital stock or the human capital stock ____ 6. Which of the following can explain the upward slope of the short-run aggregate supply curve? a. nominal wages are slow to adjust to changing economic conditions b. as the price level falls the exchange rate falls c. an increase in the money supply lowers the interest rate d. an increase in the interest rate increases investment spending Figure 33-2. ____ 7. Refer to Figure 33-2. The shift of the short-run aggregate-supply curve from AS1 to AS2 a. could be caused by an outbreak of war in the Middle East. b. could be caused by a decrease in the expected price level. c. causes the economy to experience an increase in the unemployment rate. d. causes the economy to experience stagflation. ____ 8. In the context of the aggregate-demand curve the interest-rate effect refers to the idea that when the price level increases a. the real value of money decreases; in turn the real value of the dollar increases in foreign exchange markets which decreases net exports. b. the real value of money decreases; in turn interest rates increase which decreases net exports. c. households increase their holdings of money; in turn interest rates decrease which reduces spending on investment goods. d. households increase their holdings of money; in turn interest rates increase which reduces spending on investment goods. ____ 9. Suppose the economy is in long-run equilibrium. If there is a tax cut at the same time that major new sources of oil are discovered in the country then in the short-run a. real GDP will rise and the price level might rise fall or stay the same. b. real GDP will fall and the price level might rise fall or stay the same. c. the price level will rise and real GDP might rise fall or stay the same. d. the price level will fall and real GDP might rise fall or stay the same. ____ 10. An increase in the interest rate causes investment to a. rise and the exchange rate to appreciate. b. fall and the exchange rate to depreciate. c. rise and the exchange rate to depreciate. d. fall and the exchange rate to appreciate. AS-AD ____ 1. Which of the following is not a determinant of the long-run level of real GDP? a. the price level b. the supply of labor c. available natural resources d. available technology Consider the exhibit below for the following questions. Figure 33-1 ____ 2. Refer to Figure 33-1. If the economy is at A and there is a fall in aggregate demand in the short run the economy a. stays at A. b. moves to B. c. moves to C. d. moves to D. ____ 3. Keynes explained that recessions and depressions occur because of a. excess aggregate demand. b. inadequate aggregate demand. c. excess aggregate supply. d. inadequate aggregate supply. ____ 4. In 2009 Congress passed legislation providing states with funds to build roads and bridges. It also instituted tax cuts. Which of these shifts aggregate demand right? a. only the increased funding for states b. only the tax cuts c. both the increased funding for states and the tax cuts d. neither the increased funding for states nor the tax cuts ____ 5. Which of the following shifts long-run aggregate supply right? a. an increase in either the physical or human capital stock b. an increase in the human but not the physical capital stock c. an increase in the physical capital stock but no the human capital stock d. neither an increase in the physical capital stock or the human capital stock ____ 6. Which of the following can explain the upward slope of the short-run aggregate supply curve? a. nominal wages are slow to adjust to changing economic conditions b. as the price level falls the exchange rate falls c. an increase in the money supply lowers the interest rate d. an increase in the interest rate increases investment spending Figure 33-2. ____ 7. Refer to Figure 33-2. The shift of the short-run aggregate-supply curve from AS1 to AS2 a. could be caused by an outbreak of war in the Middle East. b. could be caused by a decrease in the expected price level. c. causes the economy to experience an increase in the unemployment rate. d. causes the economy to experience stagflation. ____ 8. In the context of the aggregate-demand curve the interest-rate effect refers to the idea that when the price level increases a. the real value of money decreases; in turn the real value of the dollar increases in foreign exchange markets which decreases net exports. b. the real value of money decreases; in turn interest rates increase which decreases net exports. c. households increase their holdings of money; in turn interest rates decrease which reduces spending on investment goods. d. households increase their holdings of money; in turn interest rates increase which reduces spending on investment goods. ____ 9. Suppose the economy is in long-run equilibrium. If there is a tax cut at the same time that major new sources of oil are discovered in the country then in the short-run a. real GDP will rise and the price level might rise fall or stay the same. b. real GDP will fall and the price level might rise fall or stay the same. c. the price level will rise and real GDP might rise fall or stay the same. d. the price level will fall and real GDP might rise fall or stay the same. ____ 10. An increase in the interest rate causes investment to a. rise and the exchange rate to appreciate. b. fall and the exchange rate to depreciate. c. rise and the exchange rate to depreciate. d. fall and the exchange rate to appreciate. Show less
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