Chapter 33 - Chapter 33 Aggregate Demand and Aggregate Supply TRUE/FALSE 1 According to classical macroeconomic theory changes in the money supply

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 33 Aggregate Demand and Aggregate Supply TRUE/FALSE 1. According to classical macroeconomic theory, changes in the money supply change nominal but not real variables. ANS: T DIF: 1 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Classical economics MSC: Definitional 2. Because economists understand what things change GDP, they can predict recessions with a fair amount of accuracy. ANS: F DIF: 1 REF: 33-1 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Economic fluctuations MSC: Analytical 3. Most macroeconomic variables that measure some type of income, spending, or production fluctuate closely together. ANS: T DIF: 1 REF: 33-1 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Economic fluctuations MSC: Interpretive 4. Like real GDP, investment fluctuates, but it fluctuates much less than real GDP. . ANS: F DIF: 1 REF: 33-1 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Economic fluctuations | Investment MSC: Definitional 5. When output rises, unemployment falls. ANS: T DIF: 1 REF: 33-1 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Economic fluctuations | Unemployment MSC: Definitional 6. An increase in the money supply causes output to rise in the long run. ANS: F DIF: 1 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Monetary neutrality MSC: Definitional 7. Most economists believe that classical theory describes the world in the short run but not in the long run. ANS: F DIF: 1 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Classical dichotomy MSC: Interpretive 8. A change in the money supply changes only nominal variables in the long run. ANS: T DIF: 1 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Monetary neutrality MSC: Definitional 9. The explanations for the slopes of the aggregate demand and short-run aggregate supply curves are the same as the explanations for the slopes of demand and supply curves for specific goods and services. ANS: F DIF: 1 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Aggregate demand slope | Short-run aggregate supply slope MSC: Definitional 136 137 Chapter 33/Aggregate Demand and Aggregate Supply 10. The aggregate-demand curve shows the quantity of domestic goods and services that households, firms, the government, and customers abroad want to buy at each price level. ANS: T DIF: 2 REF: 33-2 NAT: Analytic LOC: Aggregate demand and aggregate supply TOP: Aggregate-demand curve MSC: Definitional 11. A decrease in the price level makes consumers feel wealthier, so they purchase more. This logic helps explain why the aggregate demand curve slopes downward....
View Full Document

This note was uploaded on 02/16/2012 for the course EDU 112 taught by Professor Adasd during the Spring '12 term at Alabama A&M University.

Page1 / 68

Chapter 33 - Chapter 33 Aggregate Demand and Aggregate Supply TRUE/FALSE 1 According to classical macroeconomic theory changes in the money supply

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online