Economics Chapter 14 Answers

994 Words Feb 13th, 2014 4 Pages
Question 1
1 out of 1 points

According to the aggregate demand and aggregate supply model, in the long run what is the impact of an increase in the money supply?
Answer

Selected Answer: It leads to increased price level, but there is no change in real GDP.
Correct Answer: It leads to increased price level, but there is no change in real GDP.

Question 2
1 out of 1 points

Which of the following would make the price level decrease and real GDP increase?
Answer

Selected Answer: Long-run aggregate supply shifts right.
Correct Answer: Long-run aggregate supply shifts right.

Question 3
0 out of 1 points

According to the sticky wage theory, which of the following
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What are the effects of this decrease in wealth?
Answer

Selected Answer: a decrease in consumption, shown as a movement to the left along a given aggregate demand curve
Correct Answer: a decrease in consumption, which shifts the aggregate demand curve to the left

Question 3
1 out of 1 points

Assuming that a is positive, how are theories of short-run aggregate supply expressed mathematically?
Answer

Selected Answer: quantity of output supplied = natural rate of output + a(actual price level – expected price level)
Correct Answer: quantity of output supplied = natural rate of output + a(actual price level – expected price level)

Question 4
0 out of 1 points

Why does a decrease in the price level induce an increase in the aggregate quantity of goods and services demanded?
Answer

Selected Answer: because as wealth rises, interest rates rise, and the dollar appreciates
Correct Answer: because as wealth rises, interest rates fall, and the dollar depreciates

Question 5
0 out of 1 points

Consider the exhibit below for the following questions.

Figure 14-1

Refer to Figure 14-1. How would an increase in the money supply move the economy in the short and long run?
Answer

Selected Answer: From C to B in the short run and the long run.
Correct Answer: From C to

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