Aggregate Demand & Aggregate Supply

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Aggregate demand and aggregate supply

  
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1.  Which of the following would not be included in GDP?
A.
B.
C.
D.
2.  The Department of Commerce sums the payments made to resources to arrive at GDP in the form of wages, self-employment income, rents, interest, profits, indirect taxes, and depreciation. This method of deriving GDP is called the
A.
B.
C.
D.
3.  The primary cause of frictional unemployment is      
A.
B.
C.
D.
4.  Which of the following would be officially classified as unemployed?     
A.
B.
C.
D.
5.  When individuals are unemployed because they lack the qualifications to fill available jobs, this is called     
A.
B.
C.
D.
6.  At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of
A.
B.
C.
D.
7.  High and variable rates of inflation will  
A.
B.
C.
D.
8.  The nominal salary paid to the president of the United States and the Consumer Price Index (CPI) are given for various years below.Year        Presidential Salary           CPI (2000=100)1920         $75,000                               11.61940         $75,000                                 8.11960         $100,000                              17.21980         $200,000                              49.92000         $400,000                            100.0During which of the above years was the purchasing power of the president's salary highest?
A.
B.
C.
D.
E.
9.  Which of the following explains why higher prices in the goods and services market will lead to an upward-sloping short-run aggregate supply curve?
A.
B.
C.
D.
10.  When economic growth (a gradual shift of LRAS to the right) expands the PPC of an economy,
A.
B.
C.
D.
11.  Which of the following would be most likely to shift the long-run aggregate supply curve (LRAS) to the right?
A.
B.
C.
D.
12.  Macro-equilibrium requires that equilibrium be achieved in all four key macroeconomic markets and that they are in harmony with each other
A.
B.
13.                                1996                             1997Nominal GDP         $7,661.6 billion         $8,110.9 billionGDP Deflator          109.5                             111.6Using the information in the table, answer the following questions:a. What was the 1997 real GDP expressed in 1996 prices?b. What were the 1996 and 1997 GDPs expressed in the base-year prices?c. What was the percent change in real GDP between 1996 and 1997?d. What was the inflation rate between 1996 and 1997?
14.  Label the four phases of a business cycle. What is the difference between a contraction and a recession?
15.  A country with a civilian population of 120, 000 (all over age 16) has 100,000 employed and 10,000 unemployed persons, of which 5,000 are frictionally unemployed and another 3,000 structurally unemployed (assume no seasonal unemployment).a. What is the size of the labor forceb. What is the actual unemployment ratec. What is the labor force participation rate?d. What is the natural rate of unemployment?e. Is this economy in a recession or a boom? Explain!
16.  Assuming the economy is operating at equilibrium, predict what happens to the equilibrium price level (inflation) and the equilibrium real national income level (GDP) in the short-run as a result of :A. a decrease in the raw materials:   AD___     APL___     GDP___B. Mexico's economy grows:            AD___     APL___     GDP___C. an increase in oil prices:              AD___     APL___     GDP___D. consumer confidence deterioratesAD___     APL___      GDP___
17.  Given the situation in the previous question d, how will the self-correcting mechanism work to get real GDP back to the economy's long-run potential?
18.  Given a graph with an LRAS curve that reflects an economy that is operating at less than full employment (potential level of output),a. What will happen (theoretically) to the real rate of interest and to resource prices relative to product prices?b. Is the average price level higher or lower than the economy anticipated?
19.  Your brother graduated from college 10 years ago and started to work at a salary of $20,000. You expect to graduate this year and start to work for $35,000. If the Consumer Price Index (CPI) was 80 ten years ago and is 140 this year, who will have received the higher real starting salary?
A.
B.
C.
D.
20.  Which of the following is true of the business cycle record of the United States?
A.
B.
C.
D.
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