EU22L1

  • 1

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    At potential GDP, the economy has an unemployment rate that ______________________.

    equals the natural rate of unemployment
    equals zero
    is less than the natural rate of unemployment
    equals full employment

  • 2

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    The long-run aggregate supply curve is the relationship between the quantity of real GDP supplied and ________________ when _______________.

    the price level; real GDP equals nominal GDP
    real GDP demanded; the wage rate is constant
    the price level; real GDP equals potential GDP
    real GDP demanded; the unemployment rate is constant

  • 3

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    Along the short-run aggregate supply curve, __________________.

    real GDP equals potential GDP
    real GDP equals nominal GDP
    the money wage rate is constant
    the real wage rate is constant

  • 4

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    Aggregate demand is the relationship between the quantity of ______________.

    real GDP demanded and the wage rate
    GDP demanded and the wage rate
    real GDP demanded and the inflation level
    real GDP demanded and the price level

  • 5

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    The substitution of goods in the future for goods in the present is called ___________________.

    intertemporal substitution
    international substitution
    the real money balances effect
    the price effect

  • 6

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    An example of monetary policy is an increase in ______________ by the _____________, which ___________ aggregate demand.

    the quantity of money; Bank of England; decreases
    the quantity of money; Bank of England; increases
    taxes; government; increases
    the quantity of money; government; increases

  • 7

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    Short-run macroeconomic equilibrium occurs when the quantity of real GDP demanded _______________________.

    equals potential GDP
    does not equal full-employment GDP
    equals full-employment GDP
    equals the short-run quantity of real GDP supplied

  • 8

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    When the economy is at a below full-employment equilibrium, ______________________.

    a recessionary gap exists
    an inflationary gap exists
    nominal GDP exceeds real GDP
    real GDP exceeds potential GDP

  • 9

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    If the exchange rate increases, ____________________.

    short-run aggregate supply decreases
    short-run aggregate supply increases
    aggregate demand decreases
    aggregate demand increases

  • 10

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    If potential GDP is less than real GDP, then the economy is ______________ equilibrium.

    not in short-run macroeconomic
    at a below full-employment
    in long-run macroeconomic
    at an above full-employment