Question :
91) Consider the nature of macroeconomic equilibrium. If, at a : 1384400
91) Consider the nature of macroeconomic equilibrium. If, at a particular price level, the total output demanded is greater than that supplied by producers, then
A) the price level will decline toward its equilibrium value.
B) the price level will rise toward its equilibrium value.
C) the aggregate demand curve will shift to the left, re-establishing an equilibrium.
D) the aggregate supply curve will shift to the right, re-establishing an equilibrium.
E) the aggregate supply curve will shift to the left, re-establishing equilibrium.
Answer: B
Diff: 1
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User2: Qualitative
92) If the AS curve is vertical and there is a decrease in aggregate demand, the result is
A) a decrease in the price level with no change in real GDP.
B) an equal decrease in national income.
C) an increase in the price level.
D) an increase in national income.
E) no change in either price level or real GDP.
Answer: A
Diff: 1
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User2: Qualitative
93) Consider the AD/AS model. An increase in government purchases will have no impact on equilibrium real GDP if
A) the AS curve slopes upward.
B) the AS curve is vertical.
C) the AS curve is horizontal.
D) the marginal propensity to spend is very small.
E) the simple multiplier is very small.
Answer: B
Comment: An algorithmic version of this question appears in MyEconLab
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User2: Qualitative
94) Consider the basic AD/AS model. Real GDP is demand determined along the
A) upward-sloping portion of the AS curve.
B) downward-sloping portion of the AS curve.
C) vertical portion of the AS curve.
D) horizontal portion of the AS curve.
E) None of the above – real GDP cannot be demand determined.
Answer: D
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Recall
User2: Qualitative
95) Over the horizontal range of the economy’s AS curve (assuming such a range exists), a rightward shift of the AD curve will result in
A) an increase in prices and no change in real GDP.
B) an increase in real GDP and no change in prices.
C) an increase in both real GDP and prices.
D) a decrease in both real GDP and prices.
E) a decrease in real GDP but no change in prices.
Answer: B
Comment: An algorithmic version of this question appears in MyEconLab
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User2: Qualitative
96) If the economy’s AS curve is upward sloping, a negative shock to aggregate demand will result in
A) an increase in prices and no change in real GDP.
B) a decrease in prices but no change in real GDP.
C) an increase in real GDP and no change in prices.
D) an increase in both real GDP and prices.
E) a decrease in both real GDP and prices.
Answer: E
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User2: Qualitative
97) Which of the following will cause a negative aggregate demand shock?
A) an increase in the price of raw materials
B) a decrease in the domestic price level
C) an increase in the domestic price level
D) an increase in government expenditures
E) an increase in tax rates
Answer: E
Diff: 2
Topic: 23.3b. AD shocks and AS shocks
Skill: Applied
User2: Qualitative
FIGURE 23-3
98) Refer to Figure 23-3. Which of the following statements best describes the supply side of Economy A in its current equilibrium position?
A) Unit costs are rising, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level.
B) Firms are producing well below their capacity and are willing to produce more only if prices rise.
C) Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase.
D) Firms are producing well below their capacity and are willing to produce more output with no increase in price.
E) Unit costs are rising, but firms are able to produce more output because there is excess capacity in the economy.
Answer: C
Comment: An algorithmic version of this question appears in MyEconLab
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
Objective: REVISED
User1: Graph
User2: Qualitative
99) Refer to Figure 23-3. Which of the following statements best describes the supply side of Economy B?
A) Unit costs are rising rapidly, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level.
B) Firms are producing well below their capacity and are willing to produce more only if prices rise.
C) Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase.
D) Firms are producing well below their capacity and are willing to produce more output with no increase in price.
E) Firms are not able to produce more output because there is no excess capacity in the economy.
Answer: D
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
User1: Graph
User2: Qualitative
100) Refer to Figure 23-3. Suppose the price level in Economy A is above . Which of the following statements describes what would occur?
A) The AD curve would shift to the right until macro equilibrium is reached.
B) Real GDP would be above its equilibrium level which would put downward pressure on the price level until it reaches macro equilibrium at .
C) The amount of output supplied by firms is greater than total desired expenditure; excess supply will put downward pressure on the price level until it reaches macro equilibrium at .
D) Real GDP would be below its equilibrium level which would put upward pressure on the price level until it reaches macro equilibrium.
E) The AS curve would shift to the left until macro equilibrium is reached.
Answer: C
Diff: 2
Topic: 23.3a. macroeconomic equilibrium
Skill: Applied
Objective: NEW
User1: Graph
User2: Qualitative
