33 - Chapter 15 Aggregate Demand and Aggregate Supply...

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Unformatted text preview: Chapter 15 Aggregate Demand and Aggregate Supply MULTIPLE CHOICE 1. Which of the following explains why production rises in most years? a. increases in the labor force b. increases in the capital stock c. increases in technology d. All of the above are correct. ANSWER: d. All of the above are correct. TYPE: M DIFFICULTY: 1 SECTION: 15.0 2. On average over the past 50 years, the U.S. economy has grown at the rate of about a. 1 percent per year. b. 3 percent per year. c. 4 percent per year. d. 6 percent per year. ANSWER: b. 3 percent per year. TYPE: M DIFFICULTY: 1 SECTION: 15.0 3. A short period of falling incomes and rising unemployment is called a a. depression. b. recession. c. expansion. d. business cycle. ANSWER: b. recession. TYPE: M DIFFICULTY: 1 SECTION: 15.0 4. During recessions a. workers are laid off. b. factories are idle. c. firms may find they are unable to sell all they produce. d. All of the above are correct. ANSWER: d. All of the above are correct. TYPE: M DIFFICULTY: 1 SECTION: 15.1 5. During a recession the economy experiences a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income. ANSWER: d. falling employment and income. TYPE: M DIFFICULTY: 1 SECTION: 15.1 6. Business cycles a. are easily predicted by competent economists. b. have never occurred very close together. c. can only be seen as changes in real GDP. d. None of the above is correct. ANSWER: d. None of the above are correct. TYPE: M DIFFICULTY: 1 SECTION: 15.1 123 124 Chapter 15/Aggregate Demand and Aggregate Supply 7. Business cycles a. are explained mostly by fluctuations in consumption. b. no longer are very important due to government policy. c. are fluctuations in real GDP and related variables over time. d. are easily predicted by competent economists. ANSWER: c. are fluctuations in real GDP and related variables over time. TYPE: M DIFFICULTY: 1 SECTION: 15.1 8. During recessions a. sales and profits fall. b. sales and profits rise. c. sales rise, profits fall. d. profits fall, sales rise. ANSWER: a. sales and profits fall. TYPE: M DIFFICULTY: 1 SECTION: 15.1 9. The decrease in real GDP during a recession is a. mostly a decrease in investment spending. b. mostly a decrease in consumption spending. c. about equally divided between consumption and investment spending. d. sometimes mostly a decrease in consumption and sometimes mostly a decrease in investment....
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33 - Chapter 15 Aggregate Demand and Aggregate Supply...

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