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Unformatted text preview: the interest rate are unchanged, money demand decreases. D. [All of the above] *** E. [None of the above] 16. Which of the following will shift the long run aggregate supply curve in Argentina? A. Labor is emigrating to neighboring countries. B. Vast mineral deposits are discovered. C. The price level is rising because aggregate demand is high. D. [All of the above] E. [A and B only] *** 17. Which of the following would decrease (shift) aggregate demand in China? A. An increase in government spending. B. Depreciation of the real exchange rate. C. A decrease in the expected rate of return on savings, bonds and stock. *** D. An increase in the money supply. E. [None of the above] [Use the following information to answer questions 18–19.] Suppose Canada is currently going into a recession. Consider how this affects the US. 18. In the US, A. AD will increase. B. AD will decrease. *** C. SRAS will increase. D. SRAS will decrease. 19. In the long run, and without government intervention, people in US will adjust their expectation of the price level. This will cause the _______ curve to shift to the _______ so the economy reaches full employment output. A. AD; left B. AD; right C. SRAS; left D. SRAS; right *** 20. If the price level falls, other things the same, the aggregate quantity of goods and services demanded A. decreases because the real wealth falls, domestic interest rates increase and domestic currency appreciates. B. increases, because the real wealth falls, domestic interest rates fall and domestic currency appreciates. C. increases because the real wealth rises, domestic interest rates decrease and domestic currency depreciates. *** D. decreases, because the real wealth rises, domestic interest rates increase, domestic currency depreciates. 21. After the establishment of OPEC (Organization of the Petroleum Exporting Countries), world oil...
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This test prep was uploaded on 03/03/2014 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08