Question : 31) The quantity of real GDP supplied decreases if the : 1238141

31) The quantity of real GDP supplied decreases if the price level ________ because it ________ profits.

A) rises; increases

B) rises; decreases

C) falls; increases

D) falls; decreases

E) None of the above answers is correct because the AS curve is vertical so that the quantity of real GDP supplied does not change when the price level changes.

32) If profits are high because the price level rose,

A) it is likely the result of an increase in the real wage rate.

B) new businesses open and the quantity of real GDP supplied increases.

C) business failures rise and the quantity of real GDP supplied increases.

D) potential GDP must be decreasing.

E) the AS curve shifts leftward.

33) When the price level rises, the quantity of real GDP supplied ________ because ________.

A) decreases; new businesses open

B) increases; new businesses open

C) decreases; businesses fail and have to shut their doors

D) increases; AS curve shifts rightward

E) increases; businesses fail and have to shut their doors

34) If the price level rises but the money wage rate does not, then firms will hire ________ labor and the quantity of real GDP supplied will ________.

A) more; increase

B) the same amount of; not change

C) less; decrease

D) more; not change

E) less; increase

35) It is profitable to hire more labor if the price level ________ and the money wage rate ________.

A) rises; falls

B) falls; rises

C) falls; does not change

D) does not change; rises

E) rises; rises by the same percentage

36) If the price level falls and the money wage rate does not change, some firms ________ and there is ________.

A) shut down; a leftward shift of the aggregate supply curve

B) start up; a rightward shift of the aggregate supply curve

C) shut down; a decrease in the quantity of real GDP supplied

D) shut down; a decrease in potential GDP

E) start up; an increase in potential GDP

37) When the price level rises and the money wage rate does not change,

A) the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change.

B) the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.

C) profits fall and more businesses fail.

D) existing businesses do not change their level of output.

E) the quantity of potential GDP increases because the quantity of real GDP supplied increases.

38) Moving along the aggregate supply curve,

A) the quantity of capital used increases.

B) only the price level changes.

C) technology advances.

D) the stock of human capital increases.

E) the real wage rate is constant.

39) A rise in the price level produces a ________ the aggregate supply curve.

A) rightward shift of

B) movement downward along

C) leftward shift of

D) movement upward along

E) rightward shift of the aggregate supply curve and a movement downward along

40) A fall in the price level produces a ________ the aggregate supply curve.

A) rightward shift of

B) movement downward along

C) leftward shift of

D) movement upward along

E) rightward shift of the aggregate supply curve and a movement downward along