QUESTION 17 0.16129 points Save Answer The long-run aggregate supply curve is: O downward sloping O vertical. horizontal. The long-run aggregate supply curve can be any of these. QUESTION 18 0.16129 points Save Answer The long-run aggregate supply curve will shift to the right if: O the potential output of the economy expands. the economy experiences a supply shock. The long-run aggregate supply curve is fixed, and does not move. O the economy loses productive capacity. QUESTION 19 0.16129 points Save Answer If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a: short-run demand shock. short-run supply shock. long-run supply shock. O long-run demand shock. QUESTION 20 0.16129 points Save Answer In macroeconomics, the long run refers to: O the time period when sticky wages are in place. how long it takes for output decisions to adjust to changes in economic conditions. how long it takes for prices of inputs to fully adjust to changes in economic conditions. None of these is true.QUESTION 13 0.16129 points Save Answer An aggregate supply curve that slopes upward must be: O an individual firm's supply curve. O an individual industry's supply curve. a short-run curve. a long-run curve. QUESTION 14 0.16129 points Save Answer If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be: at a lower price level and lower level of output O at a lower price level and higher level of output. ) at a higher price level and higher level of output. O at a higher price level and lower level of output. QUESTION 15 0.16129 points Save Answer In the long run: O aggregate demand tends to shift to the right. aggregate demand is fixed. aggregate supply tends to shift to the left. O aggregate supply is fixed. QUESTION 16 0.16129 points Save Answer In the short run, the aggregate supply curve reacts to: O cartels. price changes. price ceilings. wage warfare.QUESTION 9 0.16129 points Save Answer If the government does not react to a recession: O voters and consumers are likely to be happy with less government interference. O the economy will remain out of its long-run equilibrium indefinitely. the economy will recover, but much more slowly. O None of these is true. QUESTION 10 0.16129 points Save Answer If U.S. prices increase relative to the rest of the world, we would expect: government spending to increase. net exports to increase. DO net exports to decrease. net exports to be unaffected. QUESTION 11 0.16129 points Save Answer Which of the following would likely cause aggregate demand to shift to the right? A tax credit for small businesses is issued The government builds new highways O Consumer confidence regarding future income increases O All of these are likely to cause aggregate demand to shift to the right. QUESTION 12 0.16129 points Save Answer Aggregate supply is the: market value of the total quantity of goods and services demanded in the economy. total quantity of goods and services demanded in the economy. total quantity of the production of all the households in the economy. market value of the total quantity of goods and services supplied in the economy.QUESTION 25 0.16129 points Save Answer Fluctuations around the long-run aggregate supply curve: are normal for an economy. are experienced as expansions, recessions, and recoveries. are called the business cycle. All of these are true. QUESTION 26 0.16129 points Save Answer Which of the following explains that economy is at full-employment equilibram? O Potential output = C+1+G+M Actual output = Potential output Potential output = C+1+G+X Both choices 2 and 3. QUESTION 27 0.16129 points Save Answer A recessionary gap is observed when Economy is producing potential output. Economy is operating at under capacity. Economy is overheating.QUESTION 21 0.16129 points Save Answer Sticky wages cause: O the long-run aggregate supply curve to slope upward. the short-run aggregate supply curve to slope upward. the short-run aggregate supply curve to slope downward. O the long-run aggregate supply curve to slope downward. QUESTION 22 0.16129 points Save Answer Sticky wages occur because: O wages can only be changed at the end of contracts, as opposed to final good prices which can change anytime. employers must wait until the current contract ends to cut someone's pay. O unions often negotiate wages for several years in advance. O All of these are true. QUESTION 23 0.16129 points Save Answer Some call the Great Recession: O the period when the economy does not grow for four consecutive quarters. the period of economic stagnation that took place in the early 1990s. O the recession that began in 2007 due to the decline in consumer spending when the housing bubble burst. the period of high inflation that took place in the early 1970s. QUESTION 24 0.16129 points Save Answer A basic factor of production that is used to produce output is: O technology. O capital. labor. All of these are considered factor inputs.QUESTION 28 0.16129 points Save Answer If the current aggregate demand in Economia is equal to $100 and the potential output is equal to $102, the Economia is experiencing a recessionary gap by $2. a recessionary gap by $100. an inflationgap by -$2. full-employment. QUESTION 29 0.16129 points Save Answer An overheated economy is the one at which unemployment rate is high. economic growth slows down. inflationary pressure increases. price level decreases.The diagram illustrates three states of economy in three panels. Which panel in the diagram shows an inflationary economy? Panel 2 Panel 1 Price level Price level SAS SAS 102 100 ADo ADo . AD, $17.5 Real GDP $17 Real GDP Panel 3 Price level SAS 105 AD 2 ADo $18 Real GDP O Panel 1 O Panel 2 O Panel 3 O Panel 4QUESTION 5 0.16129 points Save Answer Higher interest rates motivate: individuals to spend more on consumption goods. O firms to invest more in new factories and working capital. firms to invest less in new factories and working capital. O individuals to spend more on capital goods. QUESTION 6 0.16129 points Save Answer The wealth effect: O is not present when wages keep pace with inflation. is the positive relationship between consumer spending and the overall price level. O explains the downward-sloping aggregate demand curve. O All of these are true. QUESTION 7 0.16129 points Save Answer If the government were to decrease corporate income tax, we would predict: O a shift in aggregate demand to the left. O a shift in aggregate demand to the right. O a shift straight down of aggregate demand. O a downward movement along the aggregate demand curve. QUESTION 8 0.16129 points Save Answer If the economy is in a recession, it means that: the short-run equilibrium is to the left of the long-run aggregate supply curve. O the economy is not in long-run equilibrium. O total output is less than potential output. All of these are true.QUESTION 1 0.16129 points Save Answer Which three macroeconomic variables together best describe the health of the economy? O GDP, unemployment, and employment Output, GDP, and inflation O Output, prices, and employment O Output, inflation, and prices QUESTION 2 0.16129 points Save Answer The aggregate demand curve: slopes downward. O shows the relationship between the overall price level and the level of total demand. O shows the price level on the vertical axis and output on the horizontal axis. All of these are true. QUESTION 3 0.16129 points Save Answer Consumption: is negatively related to the national price level. measures people's expenditures on real goods and services. O is a major component of aggregate demand. O All of these are true. QUESTION 4 0.16129 points Save Answer Net exports are: exports minus imports. imports plus exports. imports divided by exports. imports minus exports.Review all three panels in the diagram illustrating three states of economy. How much is the recessionary gap? Panel 2 Panel 1 Price level Price level LAS LAS SAS SAS 102 100 ADo ADo AD, $17.5 $17 Real GDP Real GDP Panel 3 Price level LAS SAS b 105 - AD2 ADo $18 Real GDP O $17 O $18 O -$0.5 $0.5