MACRO ECONOMICS EXAM 3 QUESTIONS
AND ANSWERS
Which of the following would cause the short run aggregate supply curve to shift to the
right?
A.
an increase in interest rates
B.
a technological advance
C.
an increase in the price level
D.
a decrease in inflation expectations - Answer-B
A decrease in investment causes the price level to ________ in the short run and
________ in the long run.
A.
decrease; increase
B.
increase; increase further
C.
increase; decrease
D.
decrease; decrease further - Answer-D
If workers leave a country to seek out better opportunities in another country, then this
will
A.
shift the short−run aggregate supply curve of the original country to the left.
B.
shift the short−run aggregate supply curve of the original country to the right.
C.
move the original economy down along a stationary short−run aggregate supply curve.
D.
move the original economy up along a stationary short−run aggregate supply curve. -
Answer-A
T/F: An increase in government spending will result in an increase in the price level and
an increase in real GDP in the long run. - Answer-False
,The unexpected increase in the supply of oil mentioned in the article summary resulted
in a decrease in the price of oil. After an unexpected decrease in the price of oil, the
long-run adjustment ________ the price level and ________ the unemployment rate as
they return to their original levels.
A.
increases; decreases
B.
decreases; decreases
C.
increases; increases
D.
decreases; increases - Answer-C
During the severe 2007minus−2009 recession, Delta Airlines sold ________ passenger
tickets and ________ the prices of the tickets it did sell. The result was a $1.2 billion
loss in 2009.
A.
more; cut
B.
fewer; cut
C.
fewer; raise
D.
more; raise - Answer-B
The largest liability on the balance sheet of most banks is its
A.
holdings of securities.
B.
checking account and savings account deposits of its customers.
C.
vault cash.
D.
deposits with the Federal Reserve.
E.
loans. - Answer-B
A car dealer sells you a car today in exchange for money in the future. This illustrates
which function of money?
A.
medium of exchange
B.
, unit of account
C.
standard of deferred payment
D.
store of value - Answer-C
The largest proportion of M1 is made up of
A.
checking account deposits.
B.
traveler's checks.
C.
currency.
D.
time deposits.
E.
savings account deposits - Answer-A
Spending on the war in Afghanistan is essentially categorized as government
purchases. How do increases in spending on the war in Afghanistan affect the
aggregate demand curve?
A.
They will shift the aggregate demand curve to the left.
B.
They will move the economy up along a stationary aggregate demand curve.
C.
They will shift the aggregate demand curve to the right.
D.
They will move the economy down along a stationary aggregate demand curve. -
Answer-C
If stricter immigration laws are imposed and many foreign workers in the United States
are forced to go back to their home countries.
A.
we will move up along the long-run aggregate supply curve.
B.
the long-run aggregate supply curve will shift to the right.
C.
the long-run aggregate supply curve will shift to the left.
D.
we will move down along the long-run aggregate supply curve. - Answer-C
AND ANSWERS
Which of the following would cause the short run aggregate supply curve to shift to the
right?
A.
an increase in interest rates
B.
a technological advance
C.
an increase in the price level
D.
a decrease in inflation expectations - Answer-B
A decrease in investment causes the price level to ________ in the short run and
________ in the long run.
A.
decrease; increase
B.
increase; increase further
C.
increase; decrease
D.
decrease; decrease further - Answer-D
If workers leave a country to seek out better opportunities in another country, then this
will
A.
shift the short−run aggregate supply curve of the original country to the left.
B.
shift the short−run aggregate supply curve of the original country to the right.
C.
move the original economy down along a stationary short−run aggregate supply curve.
D.
move the original economy up along a stationary short−run aggregate supply curve. -
Answer-A
T/F: An increase in government spending will result in an increase in the price level and
an increase in real GDP in the long run. - Answer-False
,The unexpected increase in the supply of oil mentioned in the article summary resulted
in a decrease in the price of oil. After an unexpected decrease in the price of oil, the
long-run adjustment ________ the price level and ________ the unemployment rate as
they return to their original levels.
A.
increases; decreases
B.
decreases; decreases
C.
increases; increases
D.
decreases; increases - Answer-C
During the severe 2007minus−2009 recession, Delta Airlines sold ________ passenger
tickets and ________ the prices of the tickets it did sell. The result was a $1.2 billion
loss in 2009.
A.
more; cut
B.
fewer; cut
C.
fewer; raise
D.
more; raise - Answer-B
The largest liability on the balance sheet of most banks is its
A.
holdings of securities.
B.
checking account and savings account deposits of its customers.
C.
vault cash.
D.
deposits with the Federal Reserve.
E.
loans. - Answer-B
A car dealer sells you a car today in exchange for money in the future. This illustrates
which function of money?
A.
medium of exchange
B.
, unit of account
C.
standard of deferred payment
D.
store of value - Answer-C
The largest proportion of M1 is made up of
A.
checking account deposits.
B.
traveler's checks.
C.
currency.
D.
time deposits.
E.
savings account deposits - Answer-A
Spending on the war in Afghanistan is essentially categorized as government
purchases. How do increases in spending on the war in Afghanistan affect the
aggregate demand curve?
A.
They will shift the aggregate demand curve to the left.
B.
They will move the economy up along a stationary aggregate demand curve.
C.
They will shift the aggregate demand curve to the right.
D.
They will move the economy down along a stationary aggregate demand curve. -
Answer-C
If stricter immigration laws are imposed and many foreign workers in the United States
are forced to go back to their home countries.
A.
we will move up along the long-run aggregate supply curve.
B.
the long-run aggregate supply curve will shift to the right.
C.
the long-run aggregate supply curve will shift to the left.
D.
we will move down along the long-run aggregate supply curve. - Answer-C
