Macroeconomics
Instructor Miller
AD/AS Model Practice Problems
1. The basic aggregate demand and aggregate supply curve model helps explain
A) fluctuations in real GDP and the price level.
B) long-term growth.
C) price fluctuations in an individual market.
D) output fluctuations in an individual market.
2. The ________ shows the relationship between the price level and quantity of real GDP demanded.
A) consumer price index
B) aggregate expenditure line
C) 45-degree line
D) aggregate demand curve
3. Becau of the slope of the aggregate demand curve, we can say that
A) a decrea in the price level leads to a lower level of real GDP demanded.
B) an increa in the price level leads to no change in the level of real GDP demanded.
C) a decrea in the price level leads to a higher level of real GDP demanded.
D) an increa in the price level leads to a higher level of real GDP demanded.
4. Which of the following best describes the "wealth effect"?
A) When the price level falls, the real value of houhold wealth falls.
淋巴结肿大吃什么药B) When the price level falls, the nominal value of houhold wealth falls.
C) When the price level falls, the nominal value of houhold wealth ris.
D) When the price level falls, the real value of houhold wealth ris.
5. The "interest rate effect" can be described as an increa in the price level that rais the interest rate and chokes off
A) government spending.
B) government spending and unplanned investment.
C) investment and consumption spending.
D) net exports.
6. The international trade effect states that
子多少笔画A) an increa in the price level will rai net exports.
B) an increa in the price level will lower net exports.
C) an increa in the price level will rai exports.
D) an increa in the price level will lower imports.
7. An increa in the price level results in a(n) ________ in the quantity of real GDP demanded becau ________.
A) decrea; a higher price level reduces consumption, investment, and net exports.
B) increa; a higher price level reduces consumption, investment, and net exports.手机指纹解锁
C) decrea; a higher price level increas consumption, investment, and net exports.
D) increa; a higher price level increas consumption, investment, and net exports.
8. The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this incread pessimism affect the aggregate demand curve?
A) This will move the economy up along a stationary aggregate demand curve.
定水位阀B) This will move the economy down along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the left.
D) This will shift the aggregate demand curve to the right.
9. Which of the following will shift the aggregate demand curve to the right, ceteris paribus?
A) an increa in interest rates
B) a decrea in disposable income
C) a decrea in expected profits for firms
D) an increa in net exports
10. If the U.S. dollar decreas in value relative to other currencies, how does this affect the aggregate demand curve?
A) This will move the economy up along a stationary aggregate demand curve.
B) This will move the economy down along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the left.
D) This will shift the aggregate demand curve to the right
11. How do lower taxes affect aggregate demand?
A) They increa disposable income, consumption, and aggregate demand.
B) They reduce disposable income, consumption, and aggregate demand.
C) They decrea corporate investment and aggregate demand.
D) They increa aggregate supply and thus increa aggregate demand as well
12. Refer to the above figure. Ceteris paribus, an increa in the price level would be reprented by a movement from
A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
13. Refer to the above figure. Ceteris paribus, an increa in interest rates, unrelated to a change in the price level, would be reprented by a movement from
A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
14. Refer to the above figure. Ceteris paribus, an increa in personal income taxes would be reprented by a movement from
A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
15. Refer to the above figure. Ceteris paribus, a decrea in government spending would be reprented by a movement from
A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
16. Full-employment GDP is also known as
A) realized GDP.
B) potential GDP.
C) politico-economic GDP.
D) balanced-budget GDP.
17. The level of aggregate supply in the long run is not affected by
A) changes in technology.
B) changes in the capital stock.
C) changes in the price level.
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D) changes in the number of workers.
18. The long-run aggregate supply curve will shift to the right if
A) the economy experiences technological change.
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B) there is a decrea in population.
C) the economy experiences high levels of inflation.
D) net exports decrea.
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19. Suppo a developing country receives more machinery and capital equipment as foreign entrepreneurs increa the amount of investment in the economy. As a result,
A) the long-run aggregate supply curve will shift to the right.
B) the long-run aggregate supply curve will shift to the left.
C) the economy will move up along the long-run aggregate supply curve.
D) the economy will move down along the long-run aggregate supply curve.
20. Which aggregate supply curve has a positive slope?
A) long run only
B) short run only
C) both long run and short run
D) neither long run nor short run
21. The short-run aggregate supply curve has a(n) ________ slope becau as prices of
________ ri, prices of ________ ri more slowly.
A) positive; final goods and rvices; inputs
B) infinite; final goods and rvices; inputs
C) positive; inputs; final goods and rvices
D) infinite; inputs; final goods and rvices
22. The invention of the cotton gin ushered in the Industrial Revolution and began a long period of technological innovation. What did this technological change do the short-run supply curve?
A) It shifted the short-run aggregate supply curve to the left.
B) It shifted the short-run aggregate supply curve to the right.
C) It moved the economy up along a stationary short-run aggregate supply curve.
D) It moved the economy down along a stationary short-run aggregate supply curve.
23. Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subquently drove up natural gas, gasoline, and heating oil prices. Three years later, once the refining capacity was restored, the prices came back down. The restoration of refining capacity should手提电脑排名
A) shift the short-run aggregate supply curve to the left.
B) shift the short-run aggregate supply curve to the right.
C) move the economy up along a stationary short-run aggregate supply curve.
D) move the economy down along a stationary short-run aggregate supply curve.
24.Refer to the above figure. Ceteris paribus, an increa in the labor force would be reprented by
a movement from
A) SRAS1 to SRAS2.
B) SRAS2 to SRAS1.
C) point A to point B.
D) point B to point A.
25. Refer to the above figure. Ceteris paribus, a decrea in the capital stock would be reprented by a movement from
A) SRAS1 to SRAS2.
B) SRAS2 to SRAS1.
C) point A to point B.
D) point B to point A.
