macro95ex8

# The ad sras and lras curves each show a relationship

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45. The AD , SRAS , and LRAS curves each show a relationship between which two economic variables? (a) The aggregate price level and output (b) The aggregate price level and the interest rate (c) Output and unemployment (d) Output and the interest rate Answer: A Level of difficulty: 1 Section: 8.4 46. When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves slopes downward? 47. When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves is vertical? 48. When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long-run aggregate supply curve

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128 Abel/Bernanke • Macroeconomics, Fifth Edition 49. A decrease in government spending on the park system would cause (a) the aggregate demand curve to shift to the right. (b) the aggregate demand curve to shift to the left. (c) a movement down and to the right along the aggregate demand curve. (d) a movement up and to the left along the aggregate demand curve. Answer: B Level of difficulty: 1 Section: 8.4 50. A decline in the stock market, which makes consumers poorer, would cause 51. In the short run, an increase in export sales would cause output to _____ and the price level to _____. 52. In the long run, an increase in consumer spending would cause output to _____ and the price level to _____. 53. In the long run, an increase in government purchases of military equipment would cause output to _____ and the aggregate price level to _____. (a) stay constant; fall (b) fall; fall (c) fall; stay constant (d) stay constant; rise Answer: D Level of difficulty: 2 Section: 8.4

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