Chapter 8 Macro Economics Questions .docx

6 on las a 1 and 4 b 1 and 5 c 2 and 4 d 2 and 5 e 3

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6 on LAS. A) 1 and 4 B) 1 and 5 C) 2 and 4 D) 2 and 5 E) 3 and 6
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5) Higher world oil prices A) decrease short-run aggregate supply. B) decrease aggregate demand. C) increase aggregate quantity demanded. D) increase short-run aggregate supply. E) increase aggregate quantity supplied. 6) Lower world coal prices A) decrease short-run aggregate supply. B) decrease aggregate quantity demanded. C) decrease aggregate quantity supplied. D) increase aggregate quantity supplied. E) increase short-run aggregate supply. 7) Which economic player does not affect aggregate demand in Canada? A) the Government of Canada. B) consumers. C) R.O.W. D) businesses. E) all of the above players affect aggregate demand in Canada. 8) Which decreases aggregate demand? A) lower interest rates. B) lower value of Canadian dollar. C) higher income taxes. D) rising price level. E) rising input prices. 9) Aggregate quantity demanded increases if A) the price level rises. B) expectations become more optimistic. C) government taxes decrease. D) the price level falls. E) interest rates fall.
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10) In short-run macroeconomic equilibrium A) short-run aggregate supply ( SAS ) equals aggregate demand ( AD ). B) the price level is stable. C) real GDP equals potential GDP. D) no one is kicking himself. E) all of the above are true. 11) In the loanable funds market, which statement is false ? A) The interest rate is the price of loanable funds. B) An increase in demand for loanable funds causes the interest rate to rise. C) An increase in consumer savings causes the interest rate to rise. D) A decrease in the interest rate causes business borrowing to rise. E) A decrease in the supply of loanable funds causes the interest rate to rise. 12) A recessionary gap most likely comes from A) a negative demand shock. B) a negative supply shock. C) a positive demand shock. D) a positive supply shock. E) OPEC.
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