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Unformatted text preview: AD-AS analysis10) Which kind of problem with the price system can lead to a break down in the coordination of economic activity?A) The price system works silently in the background.B) Prices can be slow to adjust.C) Prices may be flexible.D) all of the aboveAns: B17) Workers often have _____ contracts and so their wages tend to be ______.A) long-term; flexibleB) long-term; stickyC) short-term; stickyD) short-term; flexibleAns: B23) The short run in macroeconomics is the period in which:A) prices change significantly.B) no contracts or agreements exist to fix prices.C) demand determines output.D) the demand curve is vertical.Ans: C12) The real value of the money supply _______ as the price level falls.A) remains the sameB) decreasesC) increasesD) none of the aboveAns: C21) Which one of the following would shift the aggregate demand curve to the left?A) an increase in the money supplyB) an increase in government spendingC) an increase in exportsD) an increase in taxesAns: D30) Assuming an unchanging price level, how would an increase in the AD affect ‘real’ GDP?A) It decreases.B) It increases.C) It only changes with changes in imports.D) It only changes with changes in exports.Ans: B37) When households receive additional income and spend some of it, this is called the:A) credit increase theory.B) marginal propensity to consume.C) aggregate demand factor.D) measure of individual wealth.Ans: B2) The relationship between the price level and total output producers are willing to supply is the:A) aggregate demand curve.B) aggregate supply curve.C) sticky price curve.D) GDP multiplier.Ans: B8) Given a long-run AS curve, a drop in consumer confidence results in ____ in output and _____ in prices.A) a decrease; no changeB) no change; a decreaseC) a decrease; a decreaseD) an increase; no changeAns: B11) Which of the following factors influence the position of the long-run aggregate supply curve?A) the supply of moneyB) government spendingC) taxesD) the level of full employment outputAns: D32) Which one of the following statements is true?A) In the short run, the level of output is determined by demand.B) In the long run, the level of output is determined by demand.C) In the long run, the aggregate supply curve is horizontal.D) Where AD and AS intersect is always the full-employment level of output. Ans: AFiscal Policy8) An increase in the personal income tax rate ____ disposable income which ____ consumption....
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This note was uploaded on 02/20/2009 for the course CE ECON 300 taught by Professor N/a during the Spring '09 term at CSU Long Beach.
- Spring '09