Appendix to Chapter 10
The Self-Correcting Aggregate Demand and
Supply
Model
MULTIPLE CHOICE
1. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
In the short run, wages are assumed to be:
a. constant.
b. sticky.
c. inflexible.
d. all of the above are true.
Full: 558 Mac: 286
2. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: a
The short-run aggregate supply curve (SRAS) is the amount of real GDP:
a. produced at various price levels.
b. produced at various savings rate levels.
c. purchased at various price levels.
d. purchased at various saving rate levels.
Full: 558 Mac: 286
3. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
, In the short run, an increase in the price level causes which of the following:
a. A rightward shift in the aggregate demand curve.
b. A leftward shift in the short-run aggregate supply curve.
c. A rightward shift in the short-run aggregate supply curve.
d. A movement upward along the short-run aggregate supply curve.
Full: 558 Mac: 286
4. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
Nominal wages are assumed fixed in the short run because:
a. workers have wages stated in their contracts.
b. of minimum wage laws.
c. workers are unaware of short-run changes in their real wages.
d. all of the above are true.
e. none of the above are true.
Full: 558 Mac: 286
,5. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
If nominal wages and salaries are fixed as firms change product prices, the short-run
aggregate supply curve is:
a. vertical.
b. horizontal.
c. negatively sloped.
d. positively sloped.
Full: 558 Mac: 286
6. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: b
An explanation for why the short-run aggregate supply curve is upward-sloping is
because:
a. the quantity of real output supplied is inversely related to the aggregate supply
curve.
b. nominal incomes are fixed.
c. the capital-output ratio is fixed.
d. an increase in price will increase the marginal aggregate output.
Full: 558 Mac: 286
7. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: b
Which of the following causes a leftward shift in the short-run aggregate supply
curve?
a. An increase of goods prices while nominal incomes are unchanged.
b. An increase in nominal incomes.
c. An increase of full-employment real GDP.
d. An increase of personal consumption expenditures while the price level is
unchanged.
e. An increase of personal consumption expenditures while full-employment real
, GDP is unchanged.
Full: 558 Mac: 286
8. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: a
The short-run aggregate supply curve is:
a. upward-sloping.
b. downward-sloping.
c. horizontal.
d. vertical.
Full: 558 Mac: 286
9. Topic: Short-run aggregate supply curve, Difficulty: M, Type: RE, Answer: b
The short-run aggregate supply curve is upward-sloping because:
a. the quantity of real output supplied is inversely related to aggregate supply.
b. nominal incomes are fixed.
c. of the conjunction between the incremental capital-output ratio and the
interbank offer rate.
d. an increase in price will increase the supply of money.
Full: 558 Mac: 286
10. Topic: Short-run aggregate supply curve, Difficulty, M, Type: SA, Answer: a
Which of the following explains why higher prices in the goods and services market
measured by the CPI leads to an upward-sloping aggregate supply curve?
The Self-Correcting Aggregate Demand and
Supply
Model
MULTIPLE CHOICE
1. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
In the short run, wages are assumed to be:
a. constant.
b. sticky.
c. inflexible.
d. all of the above are true.
Full: 558 Mac: 286
2. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: a
The short-run aggregate supply curve (SRAS) is the amount of real GDP:
a. produced at various price levels.
b. produced at various savings rate levels.
c. purchased at various price levels.
d. purchased at various saving rate levels.
Full: 558 Mac: 286
3. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
, In the short run, an increase in the price level causes which of the following:
a. A rightward shift in the aggregate demand curve.
b. A leftward shift in the short-run aggregate supply curve.
c. A rightward shift in the short-run aggregate supply curve.
d. A movement upward along the short-run aggregate supply curve.
Full: 558 Mac: 286
4. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
Nominal wages are assumed fixed in the short run because:
a. workers have wages stated in their contracts.
b. of minimum wage laws.
c. workers are unaware of short-run changes in their real wages.
d. all of the above are true.
e. none of the above are true.
Full: 558 Mac: 286
,5. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: d
If nominal wages and salaries are fixed as firms change product prices, the short-run
aggregate supply curve is:
a. vertical.
b. horizontal.
c. negatively sloped.
d. positively sloped.
Full: 558 Mac: 286
6. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: b
An explanation for why the short-run aggregate supply curve is upward-sloping is
because:
a. the quantity of real output supplied is inversely related to the aggregate supply
curve.
b. nominal incomes are fixed.
c. the capital-output ratio is fixed.
d. an increase in price will increase the marginal aggregate output.
Full: 558 Mac: 286
7. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: b
Which of the following causes a leftward shift in the short-run aggregate supply
curve?
a. An increase of goods prices while nominal incomes are unchanged.
b. An increase in nominal incomes.
c. An increase of full-employment real GDP.
d. An increase of personal consumption expenditures while the price level is
unchanged.
e. An increase of personal consumption expenditures while full-employment real
, GDP is unchanged.
Full: 558 Mac: 286
8. Topic: Short-run aggregate supply curve, Difficulty: E, Type: RE, Answer: a
The short-run aggregate supply curve is:
a. upward-sloping.
b. downward-sloping.
c. horizontal.
d. vertical.
Full: 558 Mac: 286
9. Topic: Short-run aggregate supply curve, Difficulty: M, Type: RE, Answer: b
The short-run aggregate supply curve is upward-sloping because:
a. the quantity of real output supplied is inversely related to aggregate supply.
b. nominal incomes are fixed.
c. of the conjunction between the incremental capital-output ratio and the
interbank offer rate.
d. an increase in price will increase the supply of money.
Full: 558 Mac: 286
10. Topic: Short-run aggregate supply curve, Difficulty, M, Type: SA, Answer: a
Which of the following explains why higher prices in the goods and services market
measured by the CPI leads to an upward-sloping aggregate supply curve?
