12.3 The Final Equilibrium
Refer to the information provided in Figure 12.6 below to answer the questions that follow.
Figure 12.6
1) Refer to Figure 12.6. Suppose the equilibrium output is initially $600 billion. A decrease in the Z factors ________ equilibrium output and ________ the price level.
A) decreases; leaves unchanged
B) leaves unchanged; increases
C) increases; increases
D) increases; decreases
2) Refer to Figure 12.6. Suppose the equilibrium output is initially $600 billion. An oil embargo would probably
A) increase both the equilibrium output and the price level.
B) decrease the equilibrium output and increase the price level.
C) increase the equilibrium output and decrease the price level.
D) decrease both the equilibrium output and the price level.
3) Refer to Figure 12.6. Suppose the equilibrium output is initially $600 billion. A decrease in wages and an increase in government spending will, for sure, increase
A) both the equilibrium output and the price level.
B) the price level.
C) equilibrium output.
D) equilibrium output and decrease the price level.
4) Refer to Figure 12.6. Which of the following will, unambiguously, increase the price level?
A) an increase in government spending and an increase in costs
B) an increase in government spending and a decrease in costs
C) a decrease in government spending and an increase in costs
D) a decrease in government spending and a decrease in costs
5) Refer to Figure 12.6. Which of the following will, unambiguously, decrease the price level?
A) an increase in government spending and an increase in costs
B) an increase in government spending and a decrease in costs
C) a decrease in government spending and an increase in costs
D) a decrease in government spending and a decrease in costs
6) To increase the price level the government could adopt policies that
A) increase aggregate supply and aggregate demand.
B) decrease aggregate supply and aggregate demand.
C) increase aggregate supply and decrease aggregate demand.
D) decrease aggregate supply and increase aggregate demand.
7) To increase output the government could adopt policies that
A) increase aggregate supply and aggregate demand.
B) decrease aggregate supply and aggregate demand.
C) increase aggregate supply and decrease aggregate demand.
D) decrease aggregate supply and increase aggregate demand.
8) To decrease the price level the government could
A) adopt policies that discourage immigration and increase government spending.
B) adopt policies that encourage immigration and decrease government spending.
C) adopt policies that encourage technological advancement and increase government spending.
D) adopt policies that discourage technological advancement and decrease government spending.
9) To decrease output the government could
A) adopt policies that discourage immigration and increase government spending.
B) adopt policies that encourage immigration and decrease government spending.
C) adopt policies that encourage technological advancement and increase government spending.
D) adopt policies that discourage technological advancement and decrease government spending.
10) To decrease output the government could
A) adopt policies that discourage immigration and increase government spending.
B) adopt policies that encourage immigration and decrease government spending.
C) adopt policies that encourage technological advancement and increase government spending.
D) adopt policies that discourage technological advancement and decrease government spending.
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