Question 12 (1 point) Which of the following measures the overall price level? O a) the consumer price index O b) the rate of inflation c) the price of some particular commodity or service O d) the nominal GDP 15Question 15 (1 point) In the aggregate demand and aggregate supply model, when does the aggregate quantity of goods demanded increase? when real wealth falls Ob) when the interest rate rises when stock prices decrease O d) when the dollar depreciatesQuestion 14 (1 point) Which statement best describes what happens when the price level rises? a) Households increase foreign bond purchases, and the supply of dollars decreases. b) Households increase foreign bond purchases, and the supply of dollars increases 2 O C) Households decrease foreign bond purchases, and the supply of dollars decreases 15 O d) Households decrease foreign bond purchases, and the supply of dollars increasesQuestion 13 (1 point) What is an important determinant of the price at which Canadian producers can sell their oil? ( a) their ability to ship oil domestically (b) their ability to ship oil to the U.S. market only c) their ability to ship oil to overseas markets only O ") their ability to ship oil to the U.S. and to overseas marketsQuestion 1 (1 point) In the mid-1970s the price of oil rose dramatically, What did this event cause? O a) It caused Canadian prices to fall (b) It shifted aggregate supply left 9 C) The aggregate demand increased because of an increase in the demand for gasoline. 12 d) OPEC to increase oil production 15Question 2 (1 point) What happens to prices and output when the long-run aggregate-supply curve shifts left? O a ) Prices increase and output decreases (b) Prices and output both decrease. O C) Prices and output both increase. 12 d) Prices decrease and output increases 15Question 10 (1 point) Scenario 14-1 The economy is in long-run equilibrium. Suddenly, due to improved international relations, a boom experienced by a major trading partner, and the increated confidence of policymakers, citizens become more optimistic about the future and stay this way for a long time Refer to the Scenario 14-1. In the short run, which statement describes the changes that take place in the economy? a) Both the price level and real GDP rise b) The price level falls and real GDP rises. c) Both the price level and real GDP fall, d) The price level rises and real GDP fallsQuestion 7 (1 point) Which term refers to a short period of falling incomes and rising unemployment? ( a) depression O b) business cycle 12 O recession d) expansion 15Question 8 (1 point) Which expenditure item is responsible for the decrease in real GDP during a recession? (a) mostly government spendf Ob) mostly investment spending O c ) mostly consumption spending 12 Od) mostly exports 15Question 11 (1 point) What has been suggested as a reason for the severity of the Great Depression? a) a decrease in prices (b) a decline in output c) a large increase in the money supply O d) the lack of a central bank in CanadaQuestion 9 (1 point) Which government action will shift the aggregate demand right? a) closing up a military facility to reduce costs b) a repeal of an investment tax credit 9 a rise in personal income taxes 12 O d) increases in military expenditures 15Question 4 (1 point) What typically rises during a recession? O a) unemployment 6 O b) automobile sales c corporate profits 12 O d) the price level 15Question 3 (1 point) When taxes increase, consumption decreases. How is this situation represented in the aggregate demand and aggregate supply model? (a) by a movement to the right along a given aggregate-demand curve ( b) by a movement to the left along a given aggregate-demand curve O c) by shifting aggregate supply to the left O d) by shifting aggregate demand to the leftQuestion 6 (1 point) What does real GDP measure? O a) economic activity and income b) profitability of all companies in the economy primarily long-run trends 12 O d) the dollar value of all goods 15Question 5 (1 point) According to the misperceptions theory of the short-run aggregate supply curve, if the price level increases more than people expect, how do firms change their behaviour? a) They believe that the relative price has decreased, so they increase production. b) They believe that the relative price has increased, so they decrease production. c) They believe that the relative price has decreased, so they decrease production. (d) They believe that the relative price has increased, so they increase production