21. Refer to Figure 21-1. Disregarding the LAS, the AD-AS model above best depicts which scenario: A. an unfavorable supply shock. B. a recession caused by a drastic decline in the stock market C. a massive oil price collapse (favorable supply shock) D. an increase in consumer wealth due to a drastic increase in the stock market 22. Which of the following has been suggested as a contributing cause of the Great Depression in the 1930s? A. a decline in the money supply B. a dramatic decrease in stock prices C. the collapse of the banking system D. All of the above are correct. 23. Stagflation (like the U.S. experienced in the 1970s) exists when the price level A. and real GDP rises. B. rises and real GDP stagnates. C. falls and real GDP rises. D. and real GDP falls. 24. The US Total Public Debt is the grand total: A. of all past federal deficits and surpluses since the founding of our country B. of all past federal deficits since the founding of our country C. of all consumer debt in our country D. of all consumer, business and government debt in our country 25. Shifts in the aggregate-demand curve can cause fluctuations in A. neither the level of output nor the price level. B. the level of output, but not in the price level. C. the price level, but not the level of output. D. the level of output and the price level. 26. Which is true about Fiscal Policy and Monetary Policy? A. both are executed by the Federal Reserve B. they are imperfect and there are time lags in economic impact resulting from either C. both are executed by the US Congress in concert with the President of the US D. none of the above 27. If the stock market booms too much, then A. household spending often increases. To offset the effects of this on the price level and real GDP, the Fed could increase the money supply. B. household spending often increases. To offset the effects of this on the price level and real GDP, the Fed could decrease the money supply. C. household spending often decreases. To offset the effects of this on the price level and D. real GDP, the Fed could increase the money supply. household spending often decreases. To offset the effects of this on the price level and real GDP, the Fed could decrease the money supply. 28. As of Jan, 2019 there is approximately $1.7 trillion in US currency in circulation around the world, nearly $1.6 trillion of it in Federal Reserve Notes. How much of this currency is believed to reside outside of the United States and in the underground economy? a. 2/3 b. 1/2 C. 1/3 d. 3/4 29. Which of the following tends to make aggregate demand/real GDP increase by more than the amount by which government expenditures increase? a. the crowding-out effect b. the multiplier effect C. the exchange-rate effect D. the interest-rate effect 30. Assuming a multiplier effect, but no crowding-out effect, a $100 billion increase in government expenditures increases A. aggregate demand by more than $100 billion. b. aggregate demand by less than $100 billion. C. aggregate supply by more than $100 billion. d. supply by less than $100 billion. 31. If the MPC is 0.80 and there are no crowding-out effects, then an initial increase in Government Spending o $100 billion will eventually increase aggregate demand/real GDP after the multiplier is applied by a. $80 billion. B. $125 billion. C. $500 billion. D. $800 billion