EC 202 Final Exam Questions and Answers Already Passed
We distinguish between the long-run aggregate supply curve and the short-run aggregate supply
curve. In the long run
A) technology is fixed but not in the short run.
B) the price level is constant but in the short run it fluctuates.
C) the aggregate supply curve is horizontal while in the short run it is upward sloping.
D) real GDP equals potential GDP. - Answers D) real GDP equals potential GDP.
When the labor market is at full employment,
A) real GDP equals potential GDP.
B) the price level is stable.
C) the price level equals the potential price level.
D) the SAS curve is horizontal. - Answers A) real GDP equals potential GDP.
The short-run aggregate supply curve is upward sloping because in the short run the
A) money wage rate changes but the price level does not.
B) price level changes but the money wage rate does not.
C) both the money wage rate and the price level change.
D) neither the money wage rate nor the price level can change. - Answers B) price level changes
but the money wage rate does not.
In a change to immigration policy during 2012, "people younger than 30 who came to the United
States before the age of 16, pose no criminal or security threat, and were successful students or
served in the military can get a two-year deferral from deportation, Homeland Security Secretary
Janet Napolitano said," according to CNN, 06/16/2012. If many of these immigrates had
previously been afraid to work, now as a result of being able to work legally,
A) both the short-run and long-run aggregate supply curves shift rightward.
B) only the long-run aggregate supply curve shifts rightward.
C) only the short-run aggregate supply curve shifts rightward.
D) neither the short-run nor the long-run supply curve shift. - Answers A) both the short-run and
long-run aggregate supply curves shift rightward.
, Which of the following directly shifts the short-run aggregate supply curve?
A) a change in aggregate demand
B) a change in the price level
C) a change in resource prices
D) all of the above - Answers C) a change in resource prices
A decrease in the money wage rate increases ________ and an increase in the full employment
quantity of labor increases ________.
A) the SAS and the LAS; only the SAS
B) the SAS and the LAS; only the LAS
C) only the SAS; the SAS and the LAS
D) only the LAS; the SAS and the LAS - Answers C) only the SAS; the SAS and the LAS
Your real wealth is measured as the
A) amount of assets you have in dollar terms.
B) amount of money you have.
C) amount of goods and services your wealth will buy.
D) amount of goods you have divided by the price level. - Answers C) amount of goods and
services your wealth will buy.
The AD curve slopes
A) downward due to the wealth and price effects.
B) downward due to the wealth and substitution effects.
C) upward due to the price and substitution effects.
D) upward due to the wealth and substitution effects. - Answers B) downward due to the wealth
and substitution effects.
There are several reasons why the aggregate demand curve is downward sloping. Which of the
following correctly describes one of these explanations?
A) A rise in the price level raises the purchasing power wealth and increases desired
consumption.
We distinguish between the long-run aggregate supply curve and the short-run aggregate supply
curve. In the long run
A) technology is fixed but not in the short run.
B) the price level is constant but in the short run it fluctuates.
C) the aggregate supply curve is horizontal while in the short run it is upward sloping.
D) real GDP equals potential GDP. - Answers D) real GDP equals potential GDP.
When the labor market is at full employment,
A) real GDP equals potential GDP.
B) the price level is stable.
C) the price level equals the potential price level.
D) the SAS curve is horizontal. - Answers A) real GDP equals potential GDP.
The short-run aggregate supply curve is upward sloping because in the short run the
A) money wage rate changes but the price level does not.
B) price level changes but the money wage rate does not.
C) both the money wage rate and the price level change.
D) neither the money wage rate nor the price level can change. - Answers B) price level changes
but the money wage rate does not.
In a change to immigration policy during 2012, "people younger than 30 who came to the United
States before the age of 16, pose no criminal or security threat, and were successful students or
served in the military can get a two-year deferral from deportation, Homeland Security Secretary
Janet Napolitano said," according to CNN, 06/16/2012. If many of these immigrates had
previously been afraid to work, now as a result of being able to work legally,
A) both the short-run and long-run aggregate supply curves shift rightward.
B) only the long-run aggregate supply curve shifts rightward.
C) only the short-run aggregate supply curve shifts rightward.
D) neither the short-run nor the long-run supply curve shift. - Answers A) both the short-run and
long-run aggregate supply curves shift rightward.
, Which of the following directly shifts the short-run aggregate supply curve?
A) a change in aggregate demand
B) a change in the price level
C) a change in resource prices
D) all of the above - Answers C) a change in resource prices
A decrease in the money wage rate increases ________ and an increase in the full employment
quantity of labor increases ________.
A) the SAS and the LAS; only the SAS
B) the SAS and the LAS; only the LAS
C) only the SAS; the SAS and the LAS
D) only the LAS; the SAS and the LAS - Answers C) only the SAS; the SAS and the LAS
Your real wealth is measured as the
A) amount of assets you have in dollar terms.
B) amount of money you have.
C) amount of goods and services your wealth will buy.
D) amount of goods you have divided by the price level. - Answers C) amount of goods and
services your wealth will buy.
The AD curve slopes
A) downward due to the wealth and price effects.
B) downward due to the wealth and substitution effects.
C) upward due to the price and substitution effects.
D) upward due to the wealth and substitution effects. - Answers B) downward due to the wealth
and substitution effects.
There are several reasons why the aggregate demand curve is downward sloping. Which of the
following correctly describes one of these explanations?
A) A rise in the price level raises the purchasing power wealth and increases desired
consumption.
