Question 1

1pts

The long-run aggregate supply relationship refers to:

Group of answer choices

a time period long enough for the prices of both outputs and inputs to adjust to changes in the economy.

any time period of more than a year.

a time period in which input prices can change, but output prices have not had time to adjust.

a time period in which output prices can change but input prices have not had time to adjust.

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Question 2

1pts

What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road building budgets at the same time?

Group of answer choices

aggregate demandwould increase, because only federal government purchases affectaggregate demand.

aggregate demandwould decrease, because only state and local government purchases affectaggregate demand.

aggregate demandwould increase if the change in federal purchases were smaller than the change in state and local purchases.

aggregate demandwould decrease if the change in federal purchases was smaller than the change in state and local purchases.

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Question 3

1pts

If both imports and exports fell,

Group of answer choices

aggregate demand would decrease.

aggregate demand would increase.

aggregate demand would decrease if exports fell more than imports.

aggregate demand would increase if exports fell more than imports.

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Question 4

1pts

Starting from long run equilibrium, in response to a decrease in aggregate demand:

Group of answer choices

The price level will increase more in the long run than in the short run.

The short run equilibrium level of real output will be greater in the long run than in the short run.

Neither the price level nor real output will change in the long run.

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Question 5

1pts

Which of the following is true of the long-run aggregate supply curve?

Group of answer choices

It is upward slopping.

The level of Real GDP supplied changes as the price level changes.

The level of Real GDP supplied changes with the levels of capital, land, labor, and technology available to the economy.

all of the above

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Question 6

1pts

Which of the following will most likely occur in the United States as the result of an unexpected rapid growth in real income in Canada and Mexico?

Group of answer choices

an increase in aggregate demand and output in the short run

an reduction in aggregate demand and output in the short run

a reduction in the price level

an increase in the rate of unemployment in the United States

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Question 7

1pts

The long run equilibrium level of real output increases whenever:

Group of answer choices

aggregate demandincreases.

the short-run aggregate supply (SRAS) increases.

the long-run aggregate supply (LRAS) increases.

Any of the above occurs.

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Question 8

1pts

In the context of aggregate supply, the short run is defined as the period during which

Group of answer choices

some prices are set by contracts and cannot be adjusted.

prices can change, but neither aggregate supply nor aggregate demand can shift.

individuals have sufficient time to modify their behavior in response to price changes.

quantity changes cannot occur in response to changes in relative prices.

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Question 9

1pts

Increases in the burdens of government regulations can make production more costly for producers, shifting the short run aggregate supply curve left; it can also reduce potential output, shifting the long-run aggregate supply curve left.

Group of answer choices

True

False

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Question 10

1pts

A vertical long-run aggregate supply curve indicates that

Group of answer choices

an increase in the price level will not expand an economy's output capacity in the long run.

outputs greater than the long-run supply constraint cannot be achieved.

an increase in the price level will permit the economy to achieve a higher level of output.

an increase in the price level will promote technological change and more rapid economic growth.