Question 1

The saying "Money is a veil." means that

Accepted Answer

A)   while nominal variables are the first thing we may observe about an economy, what's important are the real variables and the forces that determine them.
B)   money is the principal medium of exchange in most economies.
C)   the primary determinant of short-run economic fluctuations is not real variables, but rather changes in the money supply.
D)   in the long run money is of no importance to the determination of either real or nominal variables.E) A) and B)
F) B) and C)

Question 2

Which of the following would shift long-run aggregate supply to the right?

Accepted Answer

A)   increased immigration from abroad
B)   a decrease in the price of an imported natural resource
C)   opening the economy to international trade
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 3

As the price level rises

Accepted Answer

A)   people will want to hold more money, so the interest rate rises.
B)   people will want to hold more money, so the interest rate falls.
C)   people will want to hold less money, so the interest rate falls.
D)   people will want to hold less money, so the interest rate rises.E) B) and C)
F) C) and D)

Question 4

Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital purchases. Their reaction would initially shift

Accepted Answer

A)   aggregate demand right.
B)   aggregate demand left.
C)   aggregate supply right.
D)   aggregate supply left.E) A) and B)
F) All of the above

Question 5

Other things the same, if the price level falls, people

Accepted Answer

A)   increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases.
B)   increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases.
C)   decrease foreign bond purchases, so the supply of dollars in market for foreign-currency exchange increases.
D)   decrease foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange decreases.E) None of the above
F) A) and B)

Question 6

Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

Accepted Answer

A)   temporarily low and so supply a smaller quantity of labor.
B)   temporarily low and so supply a larger quantity of labor.
C)   temporarily high and so supply a smaller quantity of labor.
D)   temporarily high and so supply a larger quantity of labor.E) A) and B)
F) C) and D)

Exam 15: Aggregate Demand and Aggregate Supply

Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital purchases. Their reaction would initially shift

Correct Answer
verified

Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

Correct Answer
verified

The saying "Money is a veil." means that

Correct Answer
verified

Which of the following would shift long-run aggregate supply to the right?

Correct Answer
verified

As the price level rises

Correct Answer
verified

Other things the same, if the price level falls, people

Correct Answer
verified

Exam 15: Aggregate Demand and Aggregate Supply

Suppose businesses in general believe that the economy is likely to head into recession and so they reduce capital purchases. Their reaction would initially shift

Correct AnswerverifiedShow Answer

Suppose workers notice a fall in their nominal wage but are slow to notice that the price of things they consume have fallen by the same percentage. They may infer that the reward to working is

Correct AnswerverifiedShow Answer

The saying "Money is a veil." means that

Correct AnswerverifiedShow Answer

Which of the following would shift long-run aggregate supply to the right?

Correct AnswerverifiedShow Answer

As the price level rises

Correct AnswerverifiedShow Answer

Other things the same, if the price level falls, people

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified