Question : 13.4   Chapter Figures The figure above shows the aggregate supply curve : 1240533

 

13.4   Chapter Figures

 

 

The figure above shows the aggregate supply curve and potential GDP.

 

1) Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when

A) the money wage rate rises.

B) the price level rises.

C) the money wage rate falls.

D) the price level falls.

E) both the price level and money wage rate rise by the same proportion.

2) If potential GDP increases, then in the figure above the potential GDP line ________, and the aggregate supply curve ________.

A) shifts rightward; does not shift

B) does not shift; shifts rightward

C) shifts rightward; shifts rightward

D) shifts rightward; shifts leftward

E) does not shift; does not shift

 

3) If the money wage rate and the price level both rise by the same proportion, then in the figure above the potential GDP line ________, and the aggregate supply curve ________.

A) shifts rightward; does not shift

B) does not shift; shifts rightward

C) shifts rightward; shifts rightward

D) shifts rightward; shifts leftward

E) does not shift; shifts leftward

The figure above shows the aggregate demand curve.

 

4) The aggregate demand curve in the figure above shifts rightward if

A) potential GDP increases.

B) the money wage rate falls.

C) taxes are hiked.

D) government expenditure decreases.

E) the expected future profit increases so that investment increases.

 

5) The aggregate demand curve in the figure above shifts rightward if

A) potential GDP increases.

B) the money wage rate falls.

C) taxes are cut.

D) government expenditure decreases.

E) the Federal Reserve raises the interest rate.

6) The aggregate demand curve in the figure above shifts rightward if

A) potential GDP increases.

B) the money wage rate falls.

C) taxes are raised.

D) government expenditure increases.

E) the Federal Reserve raises the interest rate.

 

7) The aggregate demand curve in the figure above shifts rightward if

A) potential GDP increases.

B) the money wage rate falls.

C) taxes are raised.

D) government expenditure decreases.

E) the Federal Reserve lowers the interest rate.

The figure above shows aggregate demand curves.

 

8) Based on the figure above, the aggregate demand curve will shift from AD0 to AD1 when

A) potential GDP increases.

B) the price level falls.

C) the price level rises.

D) government expenditure decreases.

E) the Federal Reserve lowers the interest rate.

 

9) Based on the figure above, the aggregate demand curve will shift from AD0 to AD2 when

A) potential GDP increases.

B) the price level falls.

C) the price level rises.

D) government expenditure decreases.

E) the Federal Reserve lowers the interest rate.

10) Based on the figure above, the aggregate demand curve will shift from AD0 to AD2 when

A) potential GDP increases.

B) the price level falls.

C) taxes are lowered.

D) government expenditure increases.

E) the Federal Reserve raises the interest rate.

 

11) Based on the figure above, the aggregate demand curve will shift from AD0 to AD2 when

A) potential GDP increases.

B) the price level falls.

C) the price level rises.

D) government expenditure decreases.

E) taxes are lowered.