Eu22L3
1
Which of the following events will increase short-run aggregate supply?
An increase in the natural rate of unemployment
An increase in foreign income
An increase in factor prices
An improvement in technology
2
Which of the following events will increase long-run aggregate supply?
A decrease in interest rates
An increase in expected profit
An increase in factor prices
An improvement in technology
3
A change in ___________ creates a movement along the aggregate demand curve, while a change in _____________ shifts the aggregate demand curve.
domestic wealth; foreign income
expected profits; tax rates
foreign income; the foreign exchange rate
the price level; inflation expectations
4
Last year in the country of Union, the price level increased and real GDP decreased. Such an outcome might have occurred because short-run aggregate supply _______________ and aggregate demand ________________.
did not change; increased
increased; increased
increased; did not change
decreased; did not change
5
The table gives the aggregate demand and aggregate supply schedules in Lotus Land. The short-run macroeconomic equilibrium is a price level of _____________ and a real GDP of __________________.
90; £400
110; £500
120; £400
100; £400
6
The table gives the aggregate demand and aggregate supply schedules in Lotus Land. In short-run equilibrium, there is __________________.
an inflationary gap of £100
a recessionary gap of £200
a recessionary gap of £100
an inflationary gap of £200
7
The table gives the aggregate demand and aggregate supply schedules in Lotus Land. Lotus Land is in short-run macroeconomic equilibrium. In the long run, Lotus Land will return to full-employment as ___________.
wages increase
wages decrease
the government cuts taxes
businesses cut their imports
8
The table gives the aggregate demand and aggregate supply schedules in Lotus Land. In long-run macroeconomic equilibrium, the price level will be ______________ and real GDP will be ______________.
110; £500
90; £400
120; £400
100; £600
9
The country of Stanley is at a below-full employment equilibrium. Which of the following events will return Stanley to full-employment?
An increase in government purchases
An improvement in technology
A natural disaster in the rest of the world
An increase in wage rates
10
When aggregate demand persistently grows at a rate that exceeds the growth rate of long-run aggregate supply, the economy will experience ______________________.
persistent full-employment
a slowdown in the economic growth rate
rising wage rates
persistent inflation