MACROECONOMICS EXAM SCRIPT 2026
FULL QUESTIONS AND CORRECT SOLUTIONS
GRADED A+
◉ an increase in net exports will shift the: Answer: aggregate
expenditures curve upward and the aggregate demand curve
rightward
◉ a decrease in expected returns on investment will most likely shift
the AD curve to the: Answer: left because Ig will decrease
◉ an increase in personal income tax rates will cause a: Answer:
decrease (left shift) in aggregate demand
◉ a decrease in intereste rates caused by a change in the price level
would cause an: Answer: increase in the quantity of real output
demanded (movement down along AD)
◉ when the economy is experiencing demand-pull inflation, its real
GDP tends to be rising. T/F? Answer: true
,◉ if the U.S. dollar appreciates in value relative to foreign currencies,
then this will: Answer: decrease aggregate demand and increase
aggregate supply
◉ wage contracts, efficiency wages, and the minimum wage are
explanations for why: Answer: wages tend to be inflexible
downward
◉ the fear of unwanted price wars may explain why many firms are
reluctant to: Answer: reduce prices when a decline in aggregate
demand occurs
◉ an increase in productivity will: Answer: increase aggregate
supply
◉ a sharp rise in the real value of stock prices, which is independent
of and change in the price level, would best be an example of:
Answer: a change in real value of consumer wealth
◉ the economy experiences an increase in the price level and a
decrease in real domestic output. explain. Answer: input prices have
increased
, ◉ the foreign purchases, interest rate, and real-balance effect
explain why the: Answer: aggregate demand curve is downward-
sloping
◉ a change in business taxes and regulation can affect production
costs and aggregate supply. T/F? Answer: true
◉ if the dollar appreciates in value relative to foreign currencies:
Answer: aggregate demand decreases because net exports decrease
◉ graphically, demand-pull inflation is shown as a: Answer:
rightward shift of the AD curve along an upsweeping AS curve
◉ the fear of unwanted price wars may explain why many firms are
reluctant to: Answer: reduce prices when a decline in aggregate
demand occurs
◉ the foreign purchases, interest rate, and real-balance effects
explains why the: Answer: aggregate demand curve is downward-
sloping
◉ what combination of factors would most likely increase aggregate
demand? Answer: an increase in consumer wealth and a decrease in
interest rates
FULL QUESTIONS AND CORRECT SOLUTIONS
GRADED A+
◉ an increase in net exports will shift the: Answer: aggregate
expenditures curve upward and the aggregate demand curve
rightward
◉ a decrease in expected returns on investment will most likely shift
the AD curve to the: Answer: left because Ig will decrease
◉ an increase in personal income tax rates will cause a: Answer:
decrease (left shift) in aggregate demand
◉ a decrease in intereste rates caused by a change in the price level
would cause an: Answer: increase in the quantity of real output
demanded (movement down along AD)
◉ when the economy is experiencing demand-pull inflation, its real
GDP tends to be rising. T/F? Answer: true
,◉ if the U.S. dollar appreciates in value relative to foreign currencies,
then this will: Answer: decrease aggregate demand and increase
aggregate supply
◉ wage contracts, efficiency wages, and the minimum wage are
explanations for why: Answer: wages tend to be inflexible
downward
◉ the fear of unwanted price wars may explain why many firms are
reluctant to: Answer: reduce prices when a decline in aggregate
demand occurs
◉ an increase in productivity will: Answer: increase aggregate
supply
◉ a sharp rise in the real value of stock prices, which is independent
of and change in the price level, would best be an example of:
Answer: a change in real value of consumer wealth
◉ the economy experiences an increase in the price level and a
decrease in real domestic output. explain. Answer: input prices have
increased
, ◉ the foreign purchases, interest rate, and real-balance effect
explain why the: Answer: aggregate demand curve is downward-
sloping
◉ a change in business taxes and regulation can affect production
costs and aggregate supply. T/F? Answer: true
◉ if the dollar appreciates in value relative to foreign currencies:
Answer: aggregate demand decreases because net exports decrease
◉ graphically, demand-pull inflation is shown as a: Answer:
rightward shift of the AD curve along an upsweeping AS curve
◉ the fear of unwanted price wars may explain why many firms are
reluctant to: Answer: reduce prices when a decline in aggregate
demand occurs
◉ the foreign purchases, interest rate, and real-balance effects
explains why the: Answer: aggregate demand curve is downward-
sloping
◉ what combination of factors would most likely increase aggregate
demand? Answer: an increase in consumer wealth and a decrease in
interest rates
