Quiz
Seminar 6
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Questions in this quiz (12)
1 In the aggregate supply relation, the current price level depends upon
- AA) expected price level.
- BB) monetary policy.
- CC) fiscal policy.
- DD) consumer confidence.
- EE) all of the above
2 Based on the aggregate supply relation, an increase in current output will cause
- AA) a shift of the aggregate supply curve.
- BB) an increase in the current price level.
- CC) a change in the expected price level this year.
- DD) an increase in the expected price level and an upward shift of the AS curve.
- EE) an increase in the markup over labor costs
3When the current price level is equal to the expected price level, we know that
- AA) the unemployment rate is zero.
- BB) the goods market and financial markets are in equilibrium.
- CC) the output is equal to the natural level of output.
- DD) the money market is in equilibrium.
- EE) none of the above
4 When the economy is operating at a point where output is greater than the natural level of output,
which of the following occurs?- AA) the unemployment rate is less than the natural unemployment rate.
- BB) the price level is greater than the expected price level.
- CC) the price level will be higher next period than it is this period.
- DD) all of the above
- EE) none of the above
5 In the aggregate demand relation, an increase in the price level causes output to decrease because of
its effect on- AA) government spending.
- BB) the money market and, subsequently, investment.
- CC) the nominal wage.
- DD) firms' markup over labor costs
- EE) the expected price level.
6 The aggregate demand curve will shift to the right when which of the following occurs?
- AA) a reduction in the money supply
- BB) a reduction in consumer confidence
- CC) a rise in the price level
- DD) a reduction in taxes
- EE) a decrease in the price level
7 Which of the following represents a short-run effect of a monetary expansion?
- AA) an increase in output
- BB) a reduction in the interest rate
- CC) an increase in the price level
- DD) all of the above
- EE) none of the above
8Assume the economy is initially operating at the natural level of output. Now suppose a budget is
passed that calls for an increase in government spending. This increase in government spending will,
in the short run, cause an increase in
A) the interest rate.
B) the price level.
C) the nominal wage.
D) all of the above
E) none of the above- AA) the interest rate.
- BB) the price level.
- CC) the nominal wage
- DD) all of the above
- EE) none of the above
9 Assume the economy is initially operating at the natural level of output. Now suppose a budget is
passed that calls for an increase in government spending. This increase in government spending will,
in the medium run, have NO effect on which of the following?- AA) employment
- BB) the interest rate
- CC) the price level
- DD) all of the above
- EE) none of the above
10 The aggregate demand (AD) curve is downward sloping because of which of the following
explanations?- AA) an increase in the money supply (M) will cause a reduction in the interest rate, an increase in
investment, and an increase in output . - BB) an increase in the aggregate price level (P) will cause an increase in the interest rate and a reduction
in output. - CC) an increase in P will cause a reduction in the real wage, an increase in employment, and an increase
in output. - DD) as P decreases in a closed economy, goods and services become relatively cheaper and individuals
respond by increasing the quantity demanded of goods and services.
- AA) an increase in the money supply (M) will cause a reduction in the interest rate, an increase in
11The aggregate supply curve (AS) is upward sloping because of which of the following
explanations?- AA) a reduction in the aggregate price level will cause a reduction in the interest rate and an increase in
output. - BB) an increase in the aggregate price level causes an increase in nominal money demand and an
increase in the interest rate. - CC) a drop in the nominal wage causes an increase in the amount of output that firms are willing to
produce. - DD) a reduction in output causes a reduction in employment, an increase in unemployment, a reduction
in the nominal wage and a reduction in the price level.
- AA) a reduction in the aggregate price level will cause a reduction in the interest rate and an increase in
12 At the current level of output, suppose the actual price level is greater than the price level that
individuals expect (i.e., Pt > Pet). We know that- AA) output is currently below the natural level of output.
- BB) the interest rate will tend to rise as the economy adjusts to this situation.
- CC) the nominal wage will tend to decrease as individuals revise their expectations of the price level.
- DD) the AS curve will tend to shift down over time.
- EE) none of the above
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- Description
- Quiz on Seminar 6, created by Gio Gobronidze on 21/05/2016.
- Author
- Gio Gobronidze
- Language
- English
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