practice problems and questions for chapter 16

practice problems and questions for chapter 16 - ECON 2100...

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ECON 2100 Practice Questions and Problems for chapter 16 Name: __________________________ Date: _____________ 1. If the marginal propensity to save is 0.3, the size of the multiplier is: A) 3.3. B) 2.3. C) 1.3. D) 0.7. 2. Suppose that the stock market crashes. Which of the following is most likely to occur? A) the aggregate demand curve shifts to the right B) the aggregate demand curve shifts to the left C) a movement up the aggregate demand curve D) a movement down the aggregate demand curve 3. Increasing the quantity of money in circulation shifts the: A) aggregate demand curve to the left. B) long-run aggregate supply curve to the right. C) aggregate demand curve to the right. D) short-run aggregate supply curve to the right. 4. During the Great Depression, the United States: A) moved to the right along its aggregate demand curve. B) moved to the right along its short-run aggregate supply curve. C) moved to the left along its aggregate demand curve. D) moved to the left along its short-run aggregate supply curve. Page 1
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5. A recessionary gap causes: A) short-run aggregate supply to gradually increase. B) short-run aggregate supply to gradually decrease. C) aggregate demand to gradually increase. D) aggregate demand to gradually decrease. 6. If the short-run macroeconomic equilibrium is _________ of the economy's potential output, then there is a(n) ________ and the aggregate price level is expected to ________. A) to the right; inflationary gap; fall B) to the right; recessionary gap; rise C) to the left; inflationary gap; fall D) to the left; recessionary gap; fall 7. Which of the following would cause a change in the short-run aggregate supply curve? A) the quantity of real output supplied B) the price level C) a determinant of the short-run aggregate supply curve D) changes in aggregate demand 8. Which of the following represent the three consequences of the decline in demand during the Great Depression? A)
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practice problems and questions for chapter 16 - ECON 2100...

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