Question :
1) Other things being equal, a rise in the domestic : 1384391
1) Other things being equal, a rise in the domestic price level
A) causes a decrease in real saving.
B) lowers the real value of all assets denominated in money units.
C) makes domestic goods more attractive to foreigners.
D) makes foreign goods less attractive to domestic residents.
E) raises the real burden of repaying a fixed money value debt.
Answer: B
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
2) Other things being equal, a fall in the domestic price level leads to a rise in private-sector wealth and thus
A) an increase in the average propensity to save.
B) an increase in autonomous desired consumption.
C) a downward shift in the AE curve.
D) a downward shift in net exports.
E) domestic goods appearing less attractive to foreigners.
Answer: B
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
Objective: REVISED
User2: Qualitative
3) Other things being equal, an exogenous rise in the domestic price level will
A) have no effect on the level of desired real expenditure.
B) increase the level of desired real expenditure.
C) decrease desired real expenditure only if it is accompanied by a change in the current income of households.
D) decrease desired real expenditure because it will affect the real value of wealth.
E) cause net exports to rise.
Answer: D
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
4) Other things being equal, when the domestic price level falls exogenously,
A) Canadian goods become more expensive relative to foreign goods.
B) the net export function shifts upward.
C) the aggregate expenditure function shifts downward.
D) imports of foreign goods rise.
E) the net export function shifts downward.
Answer: B
Diff: 2
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
5) Other things being equal, when the domestic price level rises exogenously,
A) Canadian goods become more expensive relative to foreign goods.
B) the net export function shifts upward.
C) the aggregate expenditure function shifts upward.
D) imports of foreign goods fall.
E) the desired investment function shifts upward.
Answer: A
Diff: 2
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
6) Consider a simple macro model with a given price level and demand-determined output. An exogenous change in the domestic price level changes equilibrium real GDP
A) in the same direction.
B) in the opposite direction.
C) by the same amount in the same direction.
D) by the same amount in the opposite direction.
E) by a lesser amount in either direction.
Answer: B
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
7) Other things being equal, when the price level rises, the real value of money holdings ________; when the domestic price level falls, the real value of money holdings ________.
A) rises; falls
B) falls; is not affected
C) falls; rises
D) is not affected; falls
E) is not affected; rises
Answer: C
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
8) An exogenous fall in the domestic price level causes an increase in real wealth and
A) a fall in desired investment.
B) a rise in desired consumption.
C) a downward shift in the AE curve.
D) a downward shift of the net export function.
E) a fall in government purchases.
Answer: B
Diff: 1
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
Objective: REVISED
User2: Qualitative
9) Consider a simple macro-model with demand-determined output. An exogenous increase in the domestic price level will ________ the real value of the private sector’s wealth, which leads to ________ in autonomous consumption and thus ________ shift in the AE function.
A) increase; a decrease; a downward
B) increase; an increase; a downward
C) increase; an increase; an upward
D) reduce; a decrease; a downward
E) reduce; an increase; an upward
Answer: D
Diff: 2
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
10) Consider a simple macro model with demand-determined output. An exogenous increase in the domestic price level will
A) shift both the net export function and the AE curve upward.
B) shift the net export function upward and the AE curve downward.
C) shift both the net export function and the AE curve downward.
D) shift the net export function downward and the AE curve upward.
E) pivot the net export function and the AE curve upward.
Answer: C
Diff: 2
Topic: 23.1a. effects of an exogenous change in the price level
Skill: Recall
User2: Qualitative
