ECN 211 Final Exam Review Study Guide 2026 | Economics Practice Questions &
Test Prep
Real GDP is commonly used for what? - correct answer ✔✔Short run changes.
When real GDP falls, so does what? - correct answer ✔✔- Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
When the overall economy declines that is due to what? - correct answer ✔✔- Reduction in
spending in factories
- Housing
- Inventory
When real GDP declines, what happens to the unemployment rate? - correct answer ✔✔It
increases.
What is the natural rate of unemployment? - correct answer ✔✔5% or 6%.
In the short run, what can money supply do? - correct answer ✔✔It can temporarily push real
GDP away from the long run.
Model of aggregate demand/supply - correct answer ✔✔Explains the short-run fluctuations
around its long-run trend.
, Aggregate demand - correct 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 - correct 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? -
correct answer ✔✔It increases.
When the price level decreases, what affect does that have on the interest rate, spending, and
quantity? - correct answer ✔✔- Interest rate decreases
- Spending increases
- Quantity increases
As the real exchange dollar value decreases... - correct answer ✔✔Quantity demanded
increases.
When consumption (C), investment (I), government purchases (G), and net exports (NX)
increases, how does the aggregate demand curve shift? - correct answer ✔✔It shifts to the
right.
When the government cut taxes, how does the aggregate demand curve shift? - correct answer
✔✔It shifts to the right.
When there is an increase in money supply how does the aggregate demand curve shift? -
correct answer ✔✔It shits to the right.
In the long run, the supply curve is ___ and in the short run, the supply cure is ___ - correct
answer ✔✔- Long run: Vertical
Test Prep
Real GDP is commonly used for what? - correct answer ✔✔Short run changes.
When real GDP falls, so does what? - correct answer ✔✔- Personal income
- Corporate profits
- Consumer spending
- Investment spending
- Industrial production
When the overall economy declines that is due to what? - correct answer ✔✔- Reduction in
spending in factories
- Housing
- Inventory
When real GDP declines, what happens to the unemployment rate? - correct answer ✔✔It
increases.
What is the natural rate of unemployment? - correct answer ✔✔5% or 6%.
In the short run, what can money supply do? - correct answer ✔✔It can temporarily push real
GDP away from the long run.
Model of aggregate demand/supply - correct answer ✔✔Explains the short-run fluctuations
around its long-run trend.
, Aggregate demand - correct 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 - correct 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? -
correct answer ✔✔It increases.
When the price level decreases, what affect does that have on the interest rate, spending, and
quantity? - correct answer ✔✔- Interest rate decreases
- Spending increases
- Quantity increases
As the real exchange dollar value decreases... - correct answer ✔✔Quantity demanded
increases.
When consumption (C), investment (I), government purchases (G), and net exports (NX)
increases, how does the aggregate demand curve shift? - correct answer ✔✔It shifts to the
right.
When the government cut taxes, how does the aggregate demand curve shift? - correct answer
✔✔It shifts to the right.
When there is an increase in money supply how does the aggregate demand curve shift? -
correct answer ✔✔It shits to the right.
In the long run, the supply curve is ___ and in the short run, the supply cure is ___ - correct
answer ✔✔- Long run: Vertical
