study_q_-_final_exam

study_q_-_final_exam - Study Questions for the Final Exam:...

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Study Questions for the Final Exam: Please note that these questions are for you to get more practice. They may or may not be similar to final exam questions . 1) We distinguish between the long - run aggregate supply curve and the short - run aggregate supply curve. In the long run a. technology is fixed but not in the short run b. the price level is constant but in the short run it fluctuates c. the aggregate supply curve is horizontal while in the short run it is upward sloping d. real GDP equals potential GDP 2) In the short run, firms expand their production when the price level rises because a. the money wage rate remains constant so the higher prices for their product makes it profitable for firms to expand production b. each firm must keep its production up to the level of its rivals, and some firms will expand production as the price level increases c. the higher prices allow the firm to hire more workers by offering higher wages, thereby increasing productivity and profits d. firms can increase their profits by increasing their maintenance 3) Which of the following occurs while moving along a short - run aggregate supply curve? a. The money wage rate and the price level change by the same percentage b. The money wage rate changes and the price level is constant c. The price level changes and the money wage rate is constant d. Neither the price level nor the money wage rate changes 4) Which of the following helps explain why the AD curve is downward sloping? a. If the exchange rate falls and the price level does not change, exports increase and imports decrease b. When the price level falls, the real value of wealth rises, so people save less and consume more c. If consumers and businesses expect higher prices in the future, they will purchase more today, increasing investment and consumption expenditure d. None of the above answers is correct 5) Which of the following shifts the aggregate demand curve rightward? a. an increase in the tax rate b. a decrease in the price level c. an increase in the quantity of money d. an increase in the exchange rate
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6) If aggregate demand decreases and neither short - run nor long - run aggregate supply changes, then a. the price level will increase in the short - run and decrease in the long - run b. there will be an inflationary gap c. there will be a recessionary gap d. in the long run, the long - run aggregate supply will decrease 7) If the economy is in long run equilibrium and then aggregate demand increases, in the long run the increase in aggregate demand means that the a. price level will be higher but real GDP will be unaffected b. real GDP will be larger but the price level will be unaffected c. the price level will be higher and real GDP will be larger d. neither the price level nor real GDP will be unaffected 8) In the very short run, the components of aggregate planned expenditure that depend on the level of real GDP are a. planned consumption expenditure and planned imports b. planned wealth and planned imports
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This note was uploaded on 04/03/2010 for the course ECN 001B 1b taught by Professor Baghermodjtahedi during the Spring '10 term at UC Davis.

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study_q_-_final_exam - Study Questions for the Final Exam:...

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