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Econ study guide Ch.14
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Questions in this quiz (20)
1Ch. 14 P2 Q1. The aggregate demand curve shows how real GDP purchased varies with changes in-
- AUnemployment
- Boutput
- Cthe price level
- Dinterest rate
2Ch. 14 P2 Q2. Which of the following is not a component of the aggregate demand curve?-
- AGovernment Spending (G)
- BInvestment (I)
- CConsumption (C)
- DNet Exports (x-m)
- ESaving
3Ch. 14 P2 Q3. The real balances effect occurs because a higher price level will reduce the real value of people's-
- AA) financial assets
- BB) Wages
- CC) unpaid debt
- DD) physical investments
4Ch. 14 P2 Q4. The real balances effect is the impact on real GDP caused by the _____ relationship between the price level and the real value of the financial assets-
- AA) direct
- Bb) inverse
- Cc) independent
- Dd) linear
5Ch. 14 P2 Q5. The interest-rate effect is the impact on real GDP caused by the ___ relationship between the price level and the interest rate.
- AA) direct
- BB) independent
- CC) linear
- DD) inverse
6Ch. 14 P2 Q6. The net exports effect is the ___ relationship between net exports and the price level of an economy-
- AA) inverse
- BB) independent
- CC) direct
- DD) linear
7Ch. 14 P2 Q7. Which of the following would shift the aggregate demand curve to the left?
- AA) an increase in exports
- BB) an increase in investments
- CC) an increase in government spending
- DD) A decrease in government spending
8Ch. 14 P2 Q8. Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, then-
- AA) both real GDP and the price level will fall
- BB) real GDP will fall and the price level will rise
- CC) real GDP will rise and the price level will fall
- DD) both real GDP and the price level will rise
9Ch. 14 P2 Q9. In Exhibit 14-14, resources are fully employed, and competition among producers for resources will lead to a higher price level in-
- AA) the segment labeled ab
- BB) the segment labeled bc
- CC) the segment labeled cd
- DD) both segment bc and segment cd
10Ch. 14 P2 Q10. In exhibit 14-14, as production increases, firms resort to offering higher wage rates to attract the dwindling supply of unemployed resources in-
- AA) a segment labeled ab
- BB) the segment labeled bc
- CC) the segment labeled cd
- DD) both segment bc and segment cd
11Ch.14 P2 Q11. An increase in oil prices will shift the aggregate
- AA) demand curve leftward
- BB) demand curve rightward
- CC) supply curve leftward
- DD) supply curve rightward
12Ch.14 P2 Q12. Stagflation is a period of time when the economy is experiencing-
- AA) inflation and low employment
- BB) high unemployment and low levels of inflation at the same time
- Cc) high inflation and high unemployment at the same time
- Dd) low inflation and low unemployment at the same time.
13Ch.14 P2 Q13. The shift from AS1 to AS2 in exhibit 14-15 could be used by a(n)-
- AA) sudden increase in the price of oil
- Bb)increase in input prices for most firms
- Cc) increase in workers' wages
- Dd) all of the answers above are incorrect
14Ch.14 P2 Q14. As the economy moves to the right in the Exhibit 14-16 along the upward-sloping aggregate supply curve the -
- Aa) unemployment rate rises
- Bb) unemployment rate falls
- Cc) inflation rate falls
- Dd) none of the answers above are correct
15Ch.14 P2 Q15. As the aggregate demand curve shifts from AD1 to AD2 in exhibit 14-16, the economy experiences-
- Aa) cost-push inflation
- Bb) demand-pull inflation
- Cc) wage -push inflation
- Dd) hyperinflation
16Ch.14 P2 Q16. The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption and more saving is known as the-
- AA) real balances effect
- Bb) foreign purchases effect
- Cc) income effect
- Dd) aggregate demand effect
17Ch.14 P2 Q17. Which of the following are beliefs of classical theory?
- AA)long-run full employment
- Bb) inflexible wages
- Cc) inflexible prices
- Dd) all of the answers above are correct
18Ch.14 P2 Q18. In exhibit 14-17, if aggregate demand increases from AD1 to AD2-
- AA) output and prices will increase
- Bb) output and prices will decrease
- Cc) output alone will increase
- Dd) prices alone will decrease
- Ee) prices along will increase
19Ch.14 P2 Q19. In exhibit 14-17, the aggregate demand and supply curves reflect an economy in which-
- AA) full employment is at $1,000 billion GDP
- Bb) excess aggregate supply is created when there is a shift from AD1 to AD2
- Cc) Excess aggregate demand forces prices up to P=110
- Dd) excess aggregate demand forces prices up to p=110
- Ee) a new equilibrium is found at point b
20 Ch.14 P2 Q20. In exhibit 14-17, choosing to operate the economy at GDP= $1,200 billion and P=110 would be opting for an economy of-
- Aa) no employment with inflation
- Bb) full employment without inflation
- Cc) full employment with inflation
- Dd) moderate cyclical unemployment without inflation
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- Business/Economics Quiz on Econ study guide Ch.14, created by Lena O on 04/04/2019.
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- Lena O
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