9:29 PM Fri Mar 31 64% bbprod.hvcc.edu Remaining Time: 1 hour, 37 minutes, 23 seconds. Question Completion Status: QUESTION 41 2 points Save Answer Price level (GDP price index, 2009 = 100) AD 2 AD 3 AD Real GDP (trillions of 2009 dollars) In the figure above, the shift in the aggregate demand curve from AD, to AD2 could be result of O a fall in the price level. an increase in taxes. a rise in the price level. OO a decrease in the quantity of money. O an increase in government expenditures on goods and services. QUESTION 42 2 points Save Answer Save All Answers Save and SubmitQUESTION 47 2 points Save Answer If the costs of production decrease, there is O a decrease in the quantity of real GDP supplied and a movement down along the AS curve. O an increase in the quantity of real GDP supplied and a movement up along the AS curve. C) a decrease in aggregate supply and the AS curve shifts leftward. O an increase in aggregate supply and the AS curve shifts rightward. O an increase in aggregate supply and the AS curve shifts leftward. QUESTION 48 2 points Save Answer The aggregate demand curve illustrates the relationship between O the real wage rate and the hours of labor demanded by firms. O the price level and the quantity of goods supplied by firms. O the price level and the quantity of goods demanded by households, firms, government, and foreigners. O the price level and the potential quantity demanded of real GDP. O the price level and the potential demand for real GDP. QUESTION 43 2 points Save Answer The aggregate supply curve shifts rightward when O income taxes increase. O government purchases increase. O potential GDP decreases. O the money wage rate rises. O the money wage rate falls. QUESTION 44 2 points Save Answer Changes in cause a movement along the aggregate demand curve while changes in shift the aggregate demand curve. O money wage rate; price level 0 price level; taxes O government spending; price level 0 taxes; government spending O price level; money wage rate QUESTION 2 2 points Save Answer If the expected inflation rate changes, the long-run Phillips curve and the short-run Phillips curve shifts rightward; shifts upward O does not shift; shifts upward shifts rightward; shifts downward OO shifts rightward; does not shift O does not shift; does not shiftQUESTION 23 2 points Save Answer An example ofa discretionaryfiscal stimulus policy is O cutting taxes. O induced taxes. O decreasing needs-tested spending. O decreasing government expenditure. O the automatic increase in needs-tested spending during a recession. QUESTION 24 2 points Save Answer The government expenditure multiplier is used to determine the O amount private consumption is decreased by government expenditure. O extent to which automatic stabilizers must be changed in order to avoid recessions. O amount aggregate supply is affected by a change in government expenditure. O amount aggregate demand is affected by a change in government expenditure. O extra scrutiny government action receives. QUESTION 19 2 points Save Answer A fiscal stimulus works to close a recessionary gap by shifting the O AD curve leftward and AS curve leftward. 0 potential GDP line leftward. Q As curve leftward. O AD curve leftward. O AD curve rightward. QUESTION 20 2 points Save Answer The short-run Phillips curve shows 0 a tradeoff between real GDP and unemployment. O a tradeoff between the unemployment rate and the inflation rate. 0 potential GDP. 0 the natural unemployment rate. Q the expected inflation rate. QUESTION 37 2 points Save Answer During an inflationary gap, O the aggregate demand curve and the aggregate supply curve do not intersect, 0 real GDP is less than potential GDP. O the aggregate demand curve and the aggregate supply curve intersect at potential GDP. the aggregate demand curve and the aggregate supply curve intersect at a level of real GDP that exceeds potential GDP. O the price level will fall to restore the long-run equilibrium. QUESTION 33 2 points Save Answer An economy experiences a recessionary gap. As the economy adjusts to full employment, the money wage rate Q falls, shifting the aggregate supply curve rightward. 0 falls, increasing potential GDP. O falls, shifting the aggregate demand curve leftward. O rises, shifting the aggregate demand curve rightward. O rises. shifting the aggregate supply curve leftward. QUESTION 17 2 points Save Answer If aggregate demand decreases, the O short-run Phillips curve does not shift nor is there a movement along it. Q economy moves to a higher inflation rate along its short-run Phillips curve. O short-run Phillips curve shifts leftward. O short-run Phillips curve shifts rightward. O economy moves to a lower ination rate along its short-run Phillips curve. QUESTION 13 2 points Save Answer When disposable income increases, O there is a movement upward along the consumption function, but the consumption function does not shift. O the consumption function shifts downward. O there is no movement along the consumption function, and the consumption function does not shift. there is a movement downward along the consumption function, but the consumption function does not shift. O the consumption function shifts upward. QUESTION 31 2 points Save Answer Which of the following is an example of a fiscal stimulus? decrease in government expenditure on goods and services O decrease in transfer payments increase in taxes OO decrease in taxes O None of these QUESTION 32 2 points Save Answer There are four limitations to the effectiveness of discretionary fiscal policy. Which item below is NOT one of these limitations? O shrinking area of law-maker discretion O economic forecasting fiscal multiplier O estimating potential GDP O law-making time lagQUESTION 4 2 points Save Answer A reason why discretionary fiscal policy might move the economy away from potential GDP instead of toward potential GDP is that O it is difficult to know whether real GDP is above or below potential GDP. O government programs are always expansionary. O government programs automatically move real GDP away from potential GDP. C) during a recession, politicians prefer increases in government spending over decreasing taxes. O economic forecasts consistently underestimate the impact of fiscal policy. QUESTION 45 2 points Save Answer Which of the following does M affect potential GDP? 0 the amount of entrepreneurial talent available O the quantity of capital and human capital O the quantity of labor employed O the quantity of land and natural resources O the quantity of money QUESTION 46 2 points Save Answer Aggregate demand O increases if government expenditures decrease. O increases if the exchange rate rises. O decreases if expected future income rises. O increases if the expected inflation rate increases. O increases if aggregate supply increases. QUESTION 27 2 points Save Answer According to the ASAD model, when real GDP exceeds potential GDP, then definitely O the unemployment rate is less than the natural unemployment rate. Q the actual inflation rate is equal to the expected inflation rate. Q the actual inflation rate is less than the expected inflation rate. Q the unemployment rate is equal to the natural unemployment rate. Q the unemployment rate is greater than the natural unemployment rate. QUESTION 28 2 points Save Answer The AD curve is the relationship between C) aggregate planned expenditure and the quantity of real GDP demanded. O aggregate planned expenditure and real GDP when the price level is fixed. O the quantity of real GDP demanded and the unemployment rate. Q the quantity of real GDP demanded and the quantity of real GDP supplied. O aggregate planned expenditure and the price level. 9:29 PM Fri Mar 31 64% bbprod.hvcc.edu Remaining Time: 1 hour, 37 minutes, 18 seconds. Question Completion Status: Price level (GDP price index, 2009 = 100) 1 40 1 30- AS 120 E 1 10+ 100 A 90 - 15 16 17 18 Real GDP (trillions of 2009 dollars) The figure above shows the aggregate supply curve and potential GDP. If potential GDP increases, then in the figure above the potential GDP line and the aggregate supply curve shifts rightward; shifts leftward O does not shift; shifts rightward O shifts rightward; does not shift shifts rightward; shifts rightward does not shift; does not shift Save All Answers Save and SubmitQUESTION 33 2 points Save Answer If fiscal stimulus creates a large budget then in the long run economic growth surplus; increases surplus; decreases OO deficit; increases O deficit; decreases ONone of these QUESTION 34 2 points Save Answer If the expected inflation rate rises, then the short-run Phillips curve and the long-run Phillips curve O does not shift; does not shift O shifts; does not shift O might shift; shifts only if the short-run Phillips curve shifts does not shift; shifts OO shifts; shiftsQUESTION 25 2 points Save Answer On the long-run Phillips curve, the unemployment rate Q and inflation rate can take any value. O equals the natural unemployment rate, and the inflation rate equals the expected inflation rate. Q equals the natural unemployment rate, but the inflation rate can be any value. O decreases when the inflation rate increases. O can be any value, but the inflation rate equals the expected inflation rate. QUESTION 26 2 points Save Answer In an economy with no income taxes or imports, if the MPC is .75, the multiplier is Q 0.33. O 0.25. O 3.00. O 0.50. O 4.00. QUESTION 21 2 points Save Answer As disposable income , planned consumption expenditure by a amount 0 increases; increases; larger O increases; decreases; smaller 0 decreases; increases; larger O decreases; increases; smaller 0 increases; increases; smaller QUESTION 22 2 points Save Answer The expenditure multiplier is largerthan one because 0 an increase in autonomous expenditure induces further decreases in aggregate expenditure. O an increase in autonomous expenditure induces further increases in aggregate expenditure. 0 the price level rises, thereby reinforcing the initial effect. O an increase in autonomous expenditure brings about a reduction in the real interest rate. 0 additional expenditure induces lower incomes. QUESTION 39 2 points Save Answer If taxes are cut, there is C) an increase in aggregate demand and the AD curve shifts rightward. C) no change in aggregate demand, only a change in potential GDP. O a decrease in the quantity of real GDP demanded and a movement down along the AD curve. C) an increase in the quantity of real GDP demanded and a movement up along the AD curve. C) a decrease in aggregate demand and the AD curve shifts leftward. QUESTION 40 2 points Save Answer Which of the following shifts the aggregate supply curve leftward? O decrease in the money price of oil O a fall in the price level 0 increase in the money wage rate 0 increase in potential GDP O increase in real GDP QUESTION 35 2 points Save Answer is fixed when moving along the aggregate supply curve C) The real wage rate Q The price level O Employment O The money wage rate Q Real GDP QUESTION 36 2 points Save Answer Along the aggregate supply curve, the quantity of real GDP supplied increases when the price level rises because O the real wage rate rises. O prots decrease. O the real wage rate and profits both fall. O the demand for the goods and services increases. O the real wage rate falls. QUESTION 29 2 points Save Answer A shift in the aggregate planned expenditure curve as a result ofan increase in the price level results in O no movement along the aggregate demand curve and no shift in the aggregate demand curve. O a downward movement along the aggregate demand curve. O a leftward shift in the aggregate demand curve. O a rightward shift in the aggregate demand curve. O an upward movement along the aggregate demand curve. QUESTION 30 2 points Save Answer If investment increases by $100, then the aggregate expenditure model concludes that equilibrium expenditure O remains unchanged. 0 decreases by $100. O increases by more than $100. 0 increases by $100. O increases by less than $100. Question Completion Status: O the price level and the quantity of goods supplied by firms. O the price level and the quantity of goods demanded by households, firms, government, and foreigners. O the price level and the potential quantity demanded of real GDP. 0 the price level and the potential demand for real GDP. QUESTION 49 2 points Save Answer The aggregate supply curve is O a horizontal line. O downward sloping. O a vertical line. O U-shaped. O upward sloping. QUESTION 50 2 points Save Answer An increase in technolozv potential GDP and aggregate suDDlv