Question : 31) If the price level falls and the money wage : 1227921

31) If the price level falls and the money wage rate does not change, some firms ________ and there is ________.

A) shut down; a leftward shift of the aggregate supply curve

B) start up; a rightward shift of the aggregate supply curve

C) shut down; a decrease in the quantity of real GDP supplied

D) shut down; a decrease in potential GDP

E) start up; an increase in potential GDP

32) When the price level rises and the money wage rate does not change,

A) the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change.

B) the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.

C) profits fall and more businesses fail.

D) existing businesses do not change their level of output.

E) the quantity of potential GDP increases because the quantity of real GDP supplied increases.

33) Moving along the aggregate supply curve,

A) the quantity of capital used increases.

B) only the price level changes.

C) technology advances.

D) the stock of human capital increases.

E) the real wage rate is constant.

34) A rise in the price level produces a ________ the aggregate supply curve.

A) rightward shift of

B) movement downward along

C) leftward shift of

D) movement upward along

E) rightward shift of the aggregate supply curve and a movement downward along

35) A fall in the price level produces a ________ the aggregate supply curve.

A) rightward shift of

B) movement downward along

C) leftward shift of

D) movement upward along

E) rightward shift of the aggregate supply curve and a movement downward along

36) If the money wage rate does not change, a decrease in the price level will ________ the real wage rate and ________ firms’ profit.

A) raise; decrease

B) raise; increase

C) lower; decrease

D) lower; increase

E) lower; not change

37) The money wage rate is constant when moving along

A) only the aggregate supply curve.

B) only the aggregate supply curve and the potential GDP line.

C) only the potential GDP line.

D) neither the aggregate supply curve nor the potential GDP line.

E) the aggregate supply curve, the potential GDP line, and the aggregate demand curve.

38) The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate.

A) upward; rise; rise

B) downward; fall; rise

C) upward; rise; fall

D) upward; fall; fall

E) downward; rise; rise

39) Along the aggregate supply curve, the quantity of real GDP supplied increases when the price level rises because

A) profits decrease.

B) the real wage rate falls.

C) the real wage rate rises.

D) the real wage rate and profits both fall.

E) the demand for the goods and services increases.

40) A fall in the price level brings a ________ in the real wage rate that ________ profits and can lead to ________.

A) rise; reduces; firms going out of business

B) rise; reduces; new firms entering business

C) fall; increases; firms going out of business

D) rise; increases; new firms entering business

E) fall; decreases; new firms entering business