EC140 Midterm 2 Practice Questions

I b henettaxrate t c utonomousgovernmentpurchases a d

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Unformatted text preview: t in the AD curve? A) reduction in government purchases a B) n increase in the price level a C) decrease in the price level a D) n increase in the MPC a E) n increase in the business confidence of firms a 2 6) leftward shift of the aggregate demand (AD) curve could result from A a fall in A) nduced imports. i B) he net tax rate. t C) utonomous government purchases. a D) utonomous desired saving. a E) he price level. t 7) onsider the basic AD/AS macro model. The simple multiplier is C reflected by the A) pward movement along the AD curve in response to a change in u autonomous expenditure. B) orizontal distance between initial macroeconomic equilibrium h and the new intersection of AD and AS in response to a change in autonomous expenditure. C) ownward movement along the AD curve in response to a change d in autonomous expenditure. D) ize of the rightward shift of the AD curve in response to a change s in autonomous expenditure. E) ize of the upward shift of the AD curve in response to a change in s autonomous expenditure. 8) ther things being equal, a ________ marginal propensity to spend will O lead to a ________ AD curve. A) ower; parallel leftward shift of the l B) igher; flatter h C) igher; steeper h D) ower; parallel rightward shift of the l E) ower; flatter l 9) he economyʹs aggregate supply (AS) curve shows the relationship T between the A) rice level and the total output that firms wish to produce and sell, p as technology and input prices vary. B) rice level and the marginal propensity to consume (MPC). p C) rice level and the total output that firms wish to produce and sell, p with technology and input prices held constant. D) quilibrium real GDP and desired consumption. e E) quilibrium real GDP and marginal cost. e 10) onsider the basic AD/AS model. Suppose that a rising perc...
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This note was uploaded on 08/14/2013 for the course EC 140 taught by Professor Peter during the Winter '10 term at Wilfred Laurier University .

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