ASU-ECN 211 MidTerm 3 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS
According to classical macroeconomic theory and the GDP deflator
monetary neutrality, changes in the money supply affect
3 multiple choice options
Most economists believe that classical macroeconomic b. is valid only in the long run
theory______ _.
3 multiple choice options
In the model of aggregate demand and aggregate a. output; price level
supply, the quantity of _____ is on the horizontal axis, and
3 multiple choice options
the _____is on the vertical axis.
The aggregate-demand curve slopes downward because b. the interest rate to decline
a fall in the price level causes ___ _. 3 multiple choice options
Which of the following would shift the aggregate- d. All of the answer choices are correct
demand curve to the left?
3 multiple choice options
One reason the short-run aggregate-supply curve slopes c. reduces real wages if nominal wages are sticky
upward is that a higher price level __ _. 3 multiple choice options
A change in which of the following would shift the short- d. The expected price level
run aggregate-supply curve but not the long-run 3 multiple choice options
aggregate-supply curve?
A sudden increase in business pessimism shifts the b. demand; lower
aggregate-________ curve, leading to output.
3 multiple choice options
, An increase in the aggregate demand for goods and c. in the short run; in the long run
services has a larger impact on output _____ and a larger
3 multiple choice options
impact on the price level _____ _.
Stagflation is caused by a ______ _. c. leftward shift in the aggregate-supply curve
3 multiple choice options
Small ups and downs in real GDP follow a consistent, False
predictable pattern. 1 multiple choice option
Which of the following statements about economic d. A variety of spending, income, and output measures can be used to measure
fluctuations is true? economic fluctuations because most macroeconomic quantities tend to fluctuate
together.
3 multiple choice options
According to the interest-rate effect, aggregate demand d. lower prices reduce money holdings, increase lending, interest rates fall, and
slopes downward because __ _. investment spending increases
3 multiple choice options
Which of the following would not cause a shift in the d. A change in price expectations
long-run aggregate-supply curve? 3 multiple choice options
Which of the following is not a reason why the c. The classical effect
aggregate-demand curve slopes downward? 3 multiple choice options
In the model of aggregate demand and aggregate d. shift aggregate demand to the left
supply, the initial impact of a decrease in consumer 3 multiple choice options
optimism is to _.
Which of the following statements is true regarding the b. is vertical because an equal change in all prices and wages leaves output
long-run aggregate-supply curve? The long-run unaffected
aggregate-supply curve ___ _.
3 multiple choice options
According to the wealth effect, aggregate demand a. lower prices increase the value of money holdings and consumer spending
slopes downward because __ _. increases
3 multiple choice options
The natural level of output is the amount of real GDP d. when the economy is at the natural rate of unemployment
produced ___ _. 3 multiple choice options
Suppose the price level falls. Because of fixed nominal a. sticky-wage theory of the short-run aggregate-supply curve
wage contracts, firms become less profitable and they 3 multiple choice options
cut back on production. This is a demonstration of the
_______.
According to classical macroeconomic theory and the GDP deflator
monetary neutrality, changes in the money supply affect
3 multiple choice options
Most economists believe that classical macroeconomic b. is valid only in the long run
theory______ _.
3 multiple choice options
In the model of aggregate demand and aggregate a. output; price level
supply, the quantity of _____ is on the horizontal axis, and
3 multiple choice options
the _____is on the vertical axis.
The aggregate-demand curve slopes downward because b. the interest rate to decline
a fall in the price level causes ___ _. 3 multiple choice options
Which of the following would shift the aggregate- d. All of the answer choices are correct
demand curve to the left?
3 multiple choice options
One reason the short-run aggregate-supply curve slopes c. reduces real wages if nominal wages are sticky
upward is that a higher price level __ _. 3 multiple choice options
A change in which of the following would shift the short- d. The expected price level
run aggregate-supply curve but not the long-run 3 multiple choice options
aggregate-supply curve?
A sudden increase in business pessimism shifts the b. demand; lower
aggregate-________ curve, leading to output.
3 multiple choice options
, An increase in the aggregate demand for goods and c. in the short run; in the long run
services has a larger impact on output _____ and a larger
3 multiple choice options
impact on the price level _____ _.
Stagflation is caused by a ______ _. c. leftward shift in the aggregate-supply curve
3 multiple choice options
Small ups and downs in real GDP follow a consistent, False
predictable pattern. 1 multiple choice option
Which of the following statements about economic d. A variety of spending, income, and output measures can be used to measure
fluctuations is true? economic fluctuations because most macroeconomic quantities tend to fluctuate
together.
3 multiple choice options
According to the interest-rate effect, aggregate demand d. lower prices reduce money holdings, increase lending, interest rates fall, and
slopes downward because __ _. investment spending increases
3 multiple choice options
Which of the following would not cause a shift in the d. A change in price expectations
long-run aggregate-supply curve? 3 multiple choice options
Which of the following is not a reason why the c. The classical effect
aggregate-demand curve slopes downward? 3 multiple choice options
In the model of aggregate demand and aggregate d. shift aggregate demand to the left
supply, the initial impact of a decrease in consumer 3 multiple choice options
optimism is to _.
Which of the following statements is true regarding the b. is vertical because an equal change in all prices and wages leaves output
long-run aggregate-supply curve? The long-run unaffected
aggregate-supply curve ___ _.
3 multiple choice options
According to the wealth effect, aggregate demand a. lower prices increase the value of money holdings and consumer spending
slopes downward because __ _. increases
3 multiple choice options
The natural level of output is the amount of real GDP d. when the economy is at the natural rate of unemployment
produced ___ _. 3 multiple choice options
Suppose the price level falls. Because of fixed nominal a. sticky-wage theory of the short-run aggregate-supply curve
wage contracts, firms become less profitable and they 3 multiple choice options
cut back on production. This is a demonstration of the
_______.
