1. A contractionary fiscal policy would cause the _________.

Select one:

a.aggregate demand curve to the right

b.short-run aggregate supply curve to the left

c.short-run aggregate supply curve to the right

d.aggregate demand curve to the left

2. By decreasing government spending and aggregate demand, the policy ________ the price level and ________ equilibrium real GDP, ceteris paribus.

Select one:

a.

decreases; increases

b.

increases; decreases

c.

increases; increases

d.

decreases; decreases

3. If we use a narrow definition of monopoly, then monopoly is defined as a firm ________.

Select one:

a.

that has been granted special production rights by the government

b.

that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products

c.

that can ignore the actions of all other firms because it produces a product for which there are no close substitutes

d.

that has the largest market share in an industry

4. When would 'structural unemployment' increase?

Select one:

a.

When the economy enters a recession.

b.

When the number of individuals who quit their job to find another increases.

c.

When discouraged workers drop out of the work force.

d.

When workers are replaced by machines and the workers do not have the skills to perform new jobs.

5. Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?

Select one:

a.

Marginal revenue is equal to marginal cost.

b.

Price is equal to average revenue.

c.

Price is equal to marginal cost.

d.

The firm has excess capacity.

6. When production generates a negative externality, the true cost of production is the ________.

Select one:

a.

private cost of production

b.

public cost of production

c.

social cost of production

d.

average cost of production

7. Which of the following does not explain why the quarterly rate of inflation in Australia was negative in June 2020?

Select one:

a.

Significant decreases in oil prices.

b.

Free child-care offered during the COVID-19 lockdown.

c.

Implementation of new manufacturing technology that decreased the price of computer chips.

d.

Home rental price decreases.

8. Figure 8.1 shows the demand and cost curves facing a monopolist.

Refer to Figure 8.1. To maximise profit, the firm will produce ________.

Select one:

a.

Q₁

b.

Q₂

c.

Q₃

d.

Q₄

9. Marla is an architect who is designing a home for Charles. Charles is paying Marla $150 per hour to design his new home. Charles and Marla get married, and Marla continues to work on designing the home, but she no longer charges Charles for her work. As a result, GDP ________ because ________.

Select one:

a.

falls; Marla's work takes place in the underground economy once she's married

b.

falls; Marla's work becomes less valuable once she's married

c.

rises; Marla becomes more productive once she's married

d.

falls; Marla's architectural design services are no longer bought by Charles once they're married

10. Mandatory motorcycle helmet laws are designed to reduce the severity of injuries resulting from motorcycle involvement in traffic accidents. In this sense, these mandatory helmet laws are reducing ________ of risky behaviour.

Select one:

a.

positive externalities

b.

negative externalities

c.

the private benefit

d.

the social benefit

11. The official unemployment rate may understate the true rate of unemployment because of ________.

Select one:

a.

increases in worker productivity over time

b.

changes in the wage rates which may increase unemployment

c.

workers who have more than one job

d.

discouraged workers who no longer actively look for work

12.Which of the following is true for a monopolistically competitive firm in long-run equilibrium?

Select one:

a.

P = ATC and P = MC.

b.

P = ATC and MR = MC.

c.

P > ATC and P > MR.

d.

P > MR and MC = ATC.

13.The COVID-19 pandemic caused aggregate demand to ______.

Select one:

a.

increase

b.

fall

c.

fluctuate

d.

remain constant

14. Government imposed quantitative limits on the amount of pollution firms are allowed to produce is an example of ________.

Select one:

a.

a command-and-control approach to pollution reduction

b.

the Pigovian method of pollution control

c.

a Coasian solution to pollution reduction

d.

a tradable emission allowance system of pollution control

15.Suppose a recession is caused by both a fall in aggregate demand and a supply shock. What happens to real GDP in the short run?

Select one:

a.

Real GDP increases.

b.

Real GDP decreases.

c.

Real GDP may increase if the fall in aggregate demand is larger than the fall in short-run aggregate supply or decrease if the fall in aggregate demand is smaller than the fall in short-run aggregate supply.

d.

Real GDP may decrease if the fall in aggregate demand is larger than the fall in short-run aggregate supply or increase if the fall in aggregate demand is smaller than the fall in short-run aggregate supply.

16. Which of the following is true of a typical firm in a monopolistically competitive industry?

Select one:

a.

Product differentiation allows a successful firm to emerge as a market leader in the industry.

b.

All firms have identical cost structures.

c.

The more successful firms have an incentive to merge in order to exert greater market power.

d.

Each firm acts independently.

17. Changes in the price level ________.

Select one:

a.

increase the level of aggregate supply in the long run

b.

decrease the level of aggregate supply in the long run

c.

do not affect the level of aggregate supply in the long run

d.

increase the level of aggregate supply in the long run only at very high levels of output

18. If the price level increases,

Select one:

a.

there will be an upward movement along the money demand curve.

b.

there will be a downward movement along the money demand curve.

c.

the money demand curve will shift to the left.

d.

the money demand curve will shift to the right.

please answer correctly