Question : 111) Aggregate demand (AD) shocks have a smaller effect real : 1384402

 

 

111) Aggregate demand (AD) shocks have a smaller effect on real GDP and a larger effect on the price level

A) the steeper the AS curve.

B) on the downward-sloping portion of the AS curve.

C) the flatter the AS curve.

D) on the upward-sloping portion of the AS curve.

E) if the AD curve is flatter.

Answer:  A

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

 

112) Which of the following represents a positive aggregate supply shock?

A) an outbreak of war among oil-exporting countries

B) a general labour strike across the country

C) bad weather which cripples telecommunications for one month

D) improved computer literacy for the typical worker

E) an increase in exports

Answer:  D

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

Objective:  REVISED

User2:  Qualitative

 

113) Which of the following will cause a positive aggregate supply shock?

A) an increase in the price of raw materials

B) a decrease in the price of foreign output

C) an increase in the price of foreign output

D) a decrease in the price of oil

E) a decrease in productivity

Answer:  D

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

 

114) Aggregate supply shocks cause the price level and real GDP to change in

A) the same direction with price changing by more than output.

B) the same direction and by the same amount.

C) opposite directions with price changing by less than output.

D) opposite directions but not necessarily by the same amount.

E) opposite directions but by the same amount.

Answer:  D

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

115) Consider the basic AD/AS macro model. A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level

A) and real GDP are higher than in the initial equilibrium.

B) and real GDP are lower than in the initial equilibrium.

C) is lower and real GDP higher than in the initial equilibrium.

D) is higher and real GDP remained the same as in the initial equilibrium.

E) is higher and real GDP lower than in the initial equilibrium.

Answer:  E

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

 

116) Consider the basic AD/AS model. A rise in an input price like the wage rate would be expected to create a new macroeconomic equilibrium, which in comparison to the original equilibrium, has a price level that is

A) higher and a real GDP that is higher.

B) higher and a real GDP that is lower.

C) higher and a real GDP that is the same.

D) lower and a real GDP that is higher.

E) lower and a real GDP that is lower.

Answer:  B

Diff: 2

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

Objective:  REVISED

User2:  Qualitative

 

117) Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a decrease in aggregate supply. The result will be a

A) rise in real GDP but price level changes will be indeterminate.

B) rise in real GDP and a rise in the price level.

C) rise in real GDP and a fall in the price level.

D) an indeterminate change in real GDP and a rise in the price level.

E) an indeterminate change in real GDP and a fall in the price level.

Answer:  D

Diff: 3

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

 

118) Consider the AD/AS model. Suppose there is a decrease in aggregate demand and, simultaneously, an increase in aggregate supply. The result will be a

A) rise in real GDP but price level changes will be indeterminate.

B) rise in real GDP and a rise in the price level.

C) rise in real GDP and a fall in the price level.

D) an indeterminate change in real GDP and a rise in the price level.

E) an indeterminate change in real GDP and a fall in the price level.

Answer:  E

Diff: 3

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

119) Consider the following news headline: “World commodity prices rise sharply.” Choose the statement below that best describes the likely macroeconomic effects in Canada. (Remember that Canada is both a producer and a consumer of commodities.)

A) there is no change in either the AD or the AS curves

B) the AD curve shifts to the left and the AS curve shifts to the right; the price level falls and the effect on real GDP is indeterminate

C) the AD and AS curves both shift to the left; the effect on the price level is indeterminate and real GDP decreases

D) the AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP increases

E) the AD curve shifts to the right and the AS curve shifts to the left; the price level rises and the effect on real GDP is indeterminate

Answer:  E

Diff: 3

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative

 

120) Consider the following news headline: “Governments plan massive hospital construction programs across the country.” Choose the statement below that best describes the likely macroeconomic effects.

A) the AD curve shifts to the left; the price level falls and real GDP falls

B) the AD curve shifts to the right; the price level rises and real GDP rises

C) the AD curve shifts to the right and the AS curve shifts to the left; the price level rises and the effect on real GDP is indeterminate

D) the AD curve shifts to the left and the AS curve shifts to the right; the price level falls and the effect on real GDP is indeterminate

E) the AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP rises

Answer:  B

Diff: 3

Topic:  23.3b. AD shocks and AS shocks

Skill:  Applied

User2:  Qualitative