ECN 211 FINAL EXAM REVIEW STUDY GUIDE
2026 FULL QUESTIONS AND ANSWERS
GRADED A+
◉ When real GDP falls, so does what? Answer: - Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
◉ When the overall economy declines that is due to what? Answer: -
Reduction in spending in factories
- Housing
- Inventory
◉ When real GDP declines, what happens to the unemployment
rate? Answer: It increases.
◉ What is the natural rate of unemployment? Answer: 5% or 6%.
◉ In the short run, what can money supply do? Answer: It can
temporarily push real GDP away from the long run.
,◉ Model of aggregate demand/supply Answer: Explains the short-
run fluctuations around its long-run trend.
◉ Aggregate demand Answer: The curve that shows the quantity of
goods and services households, firms, government, and customers
from abroad want to buy at each price level.
◉ Aggregate supply Answer: The curve that shows the quantity of
goods and services firms choose to produce or sell at each price
level.
◉ When there's a lower interest rate, what affect does that have on
the quantity demanded? Answer: It increases.
◉ When the price level decreases, what affect does that have on the
interest rate, spending, and quantity? Answer: - Interest rate
decreases
- Spending increases
- Quantity increases
◉ As the real exchange dollar value decreases... Answer: Quantity
demanded increases.
, ◉ When consumption (C), investment (I), government purchases
(G), and net exports (NX) increases, how does the aggregate demand
curve shift? Answer: It shifts to the right.
◉ When the government cut taxes, how does the aggregate demand
curve shift? Answer: It shifts to the right.
◉ When there is an increase in money supply how does the
aggregate demand curve shift? Answer: It shits to the right.
◉ In the long run, the supply curve is ___ and in the short run, the
supply cure is ___ Answer: - Long run: Vertical
- Short run: Slopes upward
◉ Labor, capital, natural resources, and technology is the same
regardless of what? Answer: The price level.
◉ Natural level output Answer: Production of goods and services
that the economy achieves in the long run when unemployment is at
its natural rate.
◉ What shifts the short-run aggregate supply curve to the right?
Answer: - Increase in immigration
- Decrease in minimum wage
2026 FULL QUESTIONS AND ANSWERS
GRADED A+
◉ When real GDP falls, so does what? Answer: - Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
◉ When the overall economy declines that is due to what? Answer: -
Reduction in spending in factories
- Housing
- Inventory
◉ When real GDP declines, what happens to the unemployment
rate? Answer: It increases.
◉ What is the natural rate of unemployment? Answer: 5% or 6%.
◉ In the short run, what can money supply do? Answer: It can
temporarily push real GDP away from the long run.
,◉ Model of aggregate demand/supply Answer: Explains the short-
run fluctuations around its long-run trend.
◉ Aggregate demand Answer: The curve that shows the quantity of
goods and services households, firms, government, and customers
from abroad want to buy at each price level.
◉ Aggregate supply Answer: The curve that shows the quantity of
goods and services firms choose to produce or sell at each price
level.
◉ When there's a lower interest rate, what affect does that have on
the quantity demanded? Answer: It increases.
◉ When the price level decreases, what affect does that have on the
interest rate, spending, and quantity? Answer: - Interest rate
decreases
- Spending increases
- Quantity increases
◉ As the real exchange dollar value decreases... Answer: Quantity
demanded increases.
, ◉ When consumption (C), investment (I), government purchases
(G), and net exports (NX) increases, how does the aggregate demand
curve shift? Answer: It shifts to the right.
◉ When the government cut taxes, how does the aggregate demand
curve shift? Answer: It shifts to the right.
◉ When there is an increase in money supply how does the
aggregate demand curve shift? Answer: It shits to the right.
◉ In the long run, the supply curve is ___ and in the short run, the
supply cure is ___ Answer: - Long run: Vertical
- Short run: Slopes upward
◉ Labor, capital, natural resources, and technology is the same
regardless of what? Answer: The price level.
◉ Natural level output Answer: Production of goods and services
that the economy achieves in the long run when unemployment is at
its natural rate.
◉ What shifts the short-run aggregate supply curve to the right?
Answer: - Increase in immigration
- Decrease in minimum wage
