Chapter 14 Aggregate Demand and Aggregate Supply

| November 9, 2018

4)
The long-run aggregate supply curve is
A)
downward sloping.
B)
upward sloping.
C)
a vertical line at potential output.
D)
a horizontal line at the current price level.

5)
Assuming a long-run aggregate supply curve, an increase in the money supply
results in ________ in output and ________ in price level.
A)
a decrease; a decrease
B)
an increase; no change
C)
a decrease; no change
D)
no change; an increase

6)
Assuming a long-run aggregate supply curve, a decrease in government spending
results in ________ in output and ________ in price level.
A)
no change; an increase
B)
no change; a decrease
C)
a decrease; a decrease
D)
an increase; no change

7)
Assuming a long-run aggregate supply curve, a decrease in taxes results in
________ in output and ________ in price level.
A)
a decrease; a decrease
B)
no change; an increase
C)
no change; a decrease
D)
an increase; no change

8)
Assuming a long-run aggregate supply curve, a decrease in consumer confidence
results in ________ in output and ________ in price level.
A)
a decrease; no change
B)
no change; a decrease
C)
a decrease; a decrease
D)
an increase; no change

9)
Which of the following curves reflects the idea that in the long run, output is
determined only by the factors of production and given technology?
A)
the aggregate demand curve
B)
the market supply curve
C)
the long-run aggregate supply curve
D)
the Keynesian aggregate supply curve

10)
An implication of the long-run aggregate supply curve is that continuous
increases in the money supply will result in continuous
A)
increases in price level.
B)
decreases in output and price level.
C)
decreases in output.
D)
increases in output and price level.

11)
Which of the following factors influence the position of the long-run aggregate
supply curve?
A)
the supply of money
B)
government spending
C)
taxes
D)
the level of full-employment output

12)
In the long run
A)
price and output levels are mutually dependent.
B)
the level of output depends on the price level.
C)
the level of output is independent of the price level.
D)
the price level depends on the level of output.

13)
Output in the long run is determined by which of the two following factors when
an economy operates at full employment?
A)
capital and supply
B)
imports and exports
C)
capital and labor
D)
the “real” GDP and purchases

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