ECON 201 Quiz #5, #6, #7, #8 Questions with Verified Solutions Graded A+
If foreign input prices increase and the United States purchases those inputs, then the U.S. -
Answers SRAS curve will shift leftward and U.S. prices will rise
Ceteris paribus, Real GDP and the unemployment rate are - Answers inversely related
As the interest rate rises, businesses invest _(LESS)_and the AD curve shifts to the _LEFT_ -
Answers LESS : Left
Can a change in the price level change aggregate demand - Answers No, only a change in a
nonprime factor can change aggregate demand
A decrease in the price level - Answers causes a downward movement along the existing AD
curve
If consumption changes because of a change in a factor other than the price level, then the -
Answers AD curve shifts
An increase in the price of non labor inputs - Answers shifts the SRAS curve leftward
The real balance effect is the change in - Answers purchasing power that results from a change
in the price level
If wage rates rise at the same time that labor productivity increases, what is the effect on short-
run aggregate supply (SRAS)? - Answers SRAS may rise, fall, or remain constant
Which of the following best describes how the real balance effect works? - Answers The price
level rises, purchasing power falls, a person's monetary wealth falls, ad the person buys fewer
goods and services.
The economy is currently operating at a point on its physical production possibilities frontier
(physical PPF). It is - Answers producing more than Natural Real GDP and operating below the
natural unemployment rate.
If Real GDP is less than Natural Real GDP, then the (actual) unemployment rate is - Answers
Greater than the natural unemployment rate.
Refer to Exhibit 9-5. Point B on graph (2) corresponds to which point (s) on graph (1)? - Answers
K
If the natural unemployment rate is 5.5 percent, then the economy is at full employment when
the actual unemployment rate is - Answers 5.5 percent
Refer to Exhibit 9-7. Which point is representative of the economy in an inflationary gap? -
Answers C
If foreign input prices increase and the United States purchases those inputs, then the U.S. -
Answers SRAS curve will shift leftward and U.S. prices will rise
Ceteris paribus, Real GDP and the unemployment rate are - Answers inversely related
As the interest rate rises, businesses invest _(LESS)_and the AD curve shifts to the _LEFT_ -
Answers LESS : Left
Can a change in the price level change aggregate demand - Answers No, only a change in a
nonprime factor can change aggregate demand
A decrease in the price level - Answers causes a downward movement along the existing AD
curve
If consumption changes because of a change in a factor other than the price level, then the -
Answers AD curve shifts
An increase in the price of non labor inputs - Answers shifts the SRAS curve leftward
The real balance effect is the change in - Answers purchasing power that results from a change
in the price level
If wage rates rise at the same time that labor productivity increases, what is the effect on short-
run aggregate supply (SRAS)? - Answers SRAS may rise, fall, or remain constant
Which of the following best describes how the real balance effect works? - Answers The price
level rises, purchasing power falls, a person's monetary wealth falls, ad the person buys fewer
goods and services.
The economy is currently operating at a point on its physical production possibilities frontier
(physical PPF). It is - Answers producing more than Natural Real GDP and operating below the
natural unemployment rate.
If Real GDP is less than Natural Real GDP, then the (actual) unemployment rate is - Answers
Greater than the natural unemployment rate.
Refer to Exhibit 9-5. Point B on graph (2) corresponds to which point (s) on graph (1)? - Answers
K
If the natural unemployment rate is 5.5 percent, then the economy is at full employment when
the actual unemployment rate is - Answers 5.5 percent
Refer to Exhibit 9-7. Which point is representative of the economy in an inflationary gap? -
Answers C
