Question :
11) A decrease in investment leads to ________ in aggregate : 1240535
11) A decrease in investment leads to ________ in aggregate demand and ________ in real GDP.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
E) no change; a decrease
12) A deep recession hits the world economy, and real GDP in the rest of the world decreases. In the United States,
A) aggregate supply and aggregate demand both increase, and the price level rises.
B) aggregate supply decreases while aggregate demand does not change, and the price level rises.
C) aggregate demand decreases while aggregate supply does not change, and the price level falls.
D) aggregate supply increases and aggregate demand decreases, so the effect on the price level is uncertain.
E) aggregate supply and aggregate demand both decrease, and the price level rises.
13) If the AD curve shifts rightward, then
A) both the price level and real GDP will increase.
B) the price level will increase, but no change will occur in real GDP.
C) the price level will not change, but real GDP will increase.
D) both the price level and real GDP will decrease.
E) potential GDP increases.
14) An economy is at a full-employment equilibrium, and then the aggregate demand curve shifts leftward. As a result, the price level ________ and real GDP ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) falls; does not change
15) An increase in government expenditure on goods and services ________ aggregate demand, shifting the aggregate demand curve ________ and potentially bringing the ________ phase of the business cycle.
A) decreases; rightward; expansion
B) increases; rightward; recession
C) decreases; leftward; recession
D) increases; rightward; expansion
E) increases; leftward; recession
16) The the government increases the level of government expenditure. If there is no change in the aggregate supply curve, then aggregate demand will ________, real GDP will ________, and the price level will ________.
A) increase; remain the same; increase
B) remain the same; increase; increase
C) increase; increase; increase
D) decrease; increase; increase
E) decrease; remain the same; decrease
17) If the AD curve shifts rightward while the AS curve and potential GDP don’t change, then
A) the economy will move from a peak into recession.
B) the expansion phase of the business cycle occurs.
C) there will be no change in real GDP, so the economy is at the peak of the cycle.
D) there will be no change in real GDP, so the economy is at the trough of the cycle.
E) real GDP does not change.
18) The global economy enters a recession, thereby decreasing the level of U.S. exports. If the aggregate supply curve does not shift, then aggregate demand will ________, real GDP will ________, and the price level will ________.
A) increase; remain the same; increase
B) remain the same; increase; increase
C) increase; increase; remain the same
D) decrease; increase; increase
E) decrease; decrease; decrease
19) The government passes a law which doubles the wages of all workers. Aggregate supply will ________, and real GDP will ________, and the price level will ________.
A) increase; remain the same; increase.
B) remain the same; increase; increase.
C) increase; increase; remain the same.
D) decrease; increase; increase.
E) decrease; decrease; increase.
20) A technological advance ________ aggregate supply, shifting the aggregate supply curve ________ and potentially bringing the ________ phase of the business cycle.
A) decreases; rightward; expansion
B) decreases; leftward recession
C) increases; rightward; expansion
D) increases; rightward; recession
E) increases; leftward; expansion
21) An increase in the price of oil ________ aggregate supply, shifting the aggregate supply curve ________ and potentially bringing the ________ phase of the business cycle.
A) decreases; rightward; expansion
B) increases; rightward; recession
C) increases; rightward; expansion
D) decreases; leftward; recession
E) decreases; rightward; recession
22) A crisis in the Middle East drastically raises the price of petroleum. If the aggregate demand curve does not shift, then aggregate supply will ________, real GDP will ________, and the price level will ________.
A) increase; remain the same; increase
B) decrease; decrease; increase
C) increase; increase; increase
D) remain the same; increase; increase
E) decrease; remain the same; decrease
23) Which of the following could result in a recession?
A) a rise in the price of oil
B) an increase in investment
C) a tax cut
D) an increase in the quantity of money
E) an increase in government expenditures on goods and services
24) ________ could result in a recession because it would ________.
A) A rise in the price of oil; shift the AS curve to the left.
B) An increase in investment; shift the AD curve to the right.
C) A tax cut; shift the AS curve to the left.
D) An increase in the quantity of money; shift the AS curve to the right.
E) An increase in government expenditures on goods and services; shift the AD curve to the right.
25) Real GDP definitely increases if
A) both the AD curve and the AS curve shift rightward.
B) both the AD curve and AS curve shift leftward.
C) the AD curve shifts leftward and the AS curve shifts rightward.
D) the AS curve shifts leftward and the AD curve does not shift.
E) potential GDP decreases so that real GDP exceeds potential GDP.
