This Macroeconomics quiz covers key concepts such as real GDP growth, investment volatility, aggregate supply, and the effects of price levels on consumer spending. It assesses understanding of economic fluctuations and monetary theories, essential for students of economics.
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Prices rise; output rises
Prices rise; output falls
Prices fall; output falls
Prices fall; output rises
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True
False
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False
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Shift short-run aggregate supply to the right
Shift short-run aggregate supply to the left
Shift aggregate demand to the right
Shift aggregate demand to the left
Shift long-run aggregate supply to the left
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Shifts left when the natural rate of unemployment falls
Is vertical because an equal change in all prices and wages leaves output unaffected
Is positively sloped because price expectations and wages tend to be fixed in the long run
Shifts right when the government raises the minimum wage
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Shift aggregate demand to the right
Shift aggregate demand to the left
Shift short-run aggregate supply to the right
Shift short-run aggregate supply to the left
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True
False
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A recession is when output rises above the natural rate of output
A depression is a mild recession
Economic fluctuations have been termed the "business cycle" because the movements in output are regular and predictable
A variety of spending, income, and output measures can be used to measure economic fluctuations because most macroeconomic quantities tend to fluctuate together
None of the above
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When there is no employment
When the economy is at the natural rate of investment
When the economy is at the natural rate of aggregate demand
When the economy is at the natural rate of unemployment
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Falling prices and falling output
Falling prices and rising output
Rising prices and rising output
Rising prices and falling output
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Sticky-wage theory of the short-run aggregate-supply curve
Sticky-price theory of the short-run aggregate-supply curve
Misperceptions theory of the short-run aggregate-supply curve
Classical dichotomy theory of the short-run aggregate-supply curve
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The wealth effect
The interest-rate effect
The classical dichotomy/monetary neutrality effects
The exchange-rate effect
All of the above are reasons why the aggregate-demand curve slopes downward
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An increase in the available labor
An increase in the available capital
An increase in the available technology
An increase in price expectations
All of the above shift the long-run aggregate-supply curve
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True
False
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Sticky-wage theory of the short-run aggregate-supply curve
Sticky-price theory of the short-run aggregate-supply curve
Misperceptions theory of the short-run aggregate-supply curve
Classical dichotomy theory of the short-run aggregate-supply curve
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Lower prices increase the value of money holdings and consumer spending increases
Lower prices decrease the value of money holdings and consumer spending decreases
Lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases
Lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls
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Lower prices increase the value of money holdings and consumer spending increases
Lower prices decrease the value of money holdings and consumer spending decreases
Lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases
Lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls
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False
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Prices rise; output rises
Prices rise; output falls
Prices fall; output falls
Prices fall; output rises
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Prices rise; output is unchanged from its initial value
Prices fall; output is unchanged from its initial value
Output rises; prices are unchanged from the initial value
Output falls; prices are unchanged from the initial value
Output and the price level are unchanged from their initial values
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Prices to rise and output to rise
Prices to fall and output to fall
Prices to rise and output to remain unchanged
Prices to fall and output to remain unchanged
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An increase in government spending on military equipment
An increase in price expectations
A drop in oil prices
A decrease in the money supply
None of the above
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Respond to the adverse supply shock by increasing aggregate demand, which further raises prices
Respond to the adverse supply shock by decreasing aggregate demand, which lowers prices
Respond to the adverse supply shock by decreasing short-run aggregate supply
Fail to respond to the adverse supply shock and allow the economy to adjust on its own
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People will reduce their price expectations and the short-run aggregate supply will shift left
People will reduce their price expectations and the short-run aggregate supply will shift right
People will raise their price expectations and aggregate demand will shift left
People will reduce their price expectations and aggregate demand will shift right
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Prices rise; output is unchanged from its initial value
Prices fall; output is unchanged from its initial value
Output rises; prices are unchanged from the initial value
Output falls; prices are unchanged from the initial value
Output and the price level are unchanged from their initial values
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