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Aggregate Demand and Supply: Help and Review Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Which of the following BEST describes crowding out?

Question 2 2. What does it mean when the demand for labor shifts to the right?

Question 3 3. Why can crowding out have a strong impact on the economy?

Question 4 4. In the Classical model, how does a vertical aggregate supply curve affect other economic drivers?

Question 5 5. Which of the following most accurately describes the difference between the short-run aggregate supply curve and the long-run aggregate supply curve?

Page 2

Question 6 6. What is the marginal propensity to consume?

Question 7 7. Which of the following will happen in the short run as a result of a favorable supply shock?

Question 8 8. In the Keynesian model, what is the orientation of the aggregate supply curve?

Question 9 9. What is meant by short run'?

Question 10 10. Which is the best description of the short-run aggregate supply curve?

Page 3

Question 11 11. As income rises from $50,000 to $60,000, consumption increases from $40,000 to $48,000. In this case, what is the MPC?

Question 12 12. Keynesian economics believe that insufficient aggregate demand can result in:

Question 13 13. What do classical economists believe?

Question 14 14. When there is an unexpected increase in the world supply of oil, the Real GDP will _____.

Question 15 15. Which of the following will cause aggregate supply to decrease?

Page 4

Question 16 16. In the Classical model, what shape is the aggregate supply curve?

Question 17 17. Which of the following is true of wages and prices in the Keynesian Model?

Question 18 18. What did Keynes believe?

Question 19 19. What do you need to calculate in order to determine the marginal propensity to consume?

Question 20 20. Which best defines aggregate supply in the short-run?

Page 5

Question 21 21. The economy is at the full employment level of real GDP. If wages and prices are flexible, how would a decline in aggregate demand affect GDP and prices in the short run and long run?

Question 22 22. Labor supply is the total hours that workers or employees are willing to work at a given _____.

Question 23 23. Which of the following is true about business expenses and business taxes?

Question 24 24. Assume that consumption spending is $16,000. For every $200 increase in disposable income, saving goes up by $20. Which of the following statements is true?

Question 25 25. The short-run effects of an unfavorable oil shock would likely include which of the following?

Page 6

Question 26 26. The _____ Model more accurately describes economic growth in the _____.

Question 27 27. Prices in the economy can be sticky because of things like _____

Question 28 28. Which of the following statements is NOT true regarding the marginal propensity to save?

Question 29 29. In a certain fiscal year, the federal government receives $4 trillion in revenue and spends $3.8 trillion for goods and services. What effect would this have on the national debt?

Question 30 30. Which model of economic growth more accurately describes economic growth in the long-run?

Aggregate Demand and Supply: Help and Review Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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