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Answer Practice Questions Final Exam

Answer Practice Questions Final Exam - Answers to Practice...

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Answers to Practice Questions for Final Exam 1. The steeper the short-run aggregate supply curve, a. the smaller the impact of a shift in aggregate demand on equilibrium output b. the larger the value of the spending multiplier c. the larger the impact of a shift in aggregate demand on equilibrium output d. the smaller the change in government spending needed to achieve the desired change in equilibrium output e. the flatter the aggregate demand curve 2. On a graph showing the interest rate (or the expected rate of return on investment) along the vertical axis and investment along the horizontal axis, 3. A fall in the price level will shift the aggregate expenditure curve a. upward and shift the aggregate demand curve to the left b. downward and shift the aggregate demand curve to the left c. upward and shift the aggregate demand curve to the right d. upward and cause a movement along the aggregate demand curve e. downward and shift the aggregate demand curve to the right Exhibit 11-5 4. If an economy’s natural rate of unemployment is 4.5%, then at point M
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5. In economics, money is an example of the category of resources we call ‘capital’. 6. The nation of Omega has an MPC of 0.70 . Therefore, Omega’s spending multiplier is a. 1.18 b. 2.22 c. 3.33 d. 1.43 e. This question cannot be answered without knowing the MPS 7. An increase in autonomous government purchases will have exactly the same effect on the aggregate demand curve as an equal increase in 8. If the actual price level exceeds the expected price level reflected in long-term contracts,
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