Aggregate Demand and Supply 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!

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Question 1 1. How will the supply curve for labor be affected if people decide that they value vacation time more highly and consequently decide to work fewer hours at each wage point?

Question 2 2. How is an increase in the average price level in the economy along with a short run decrease in real GDP most likely caused?

Question 3 3. Which of the following BEST describes crowding out?

Question 4 4. The equilibrium point of the SRAS and AD is in what direction compared to the LRAS during an expansionary gap?

Question 5 5. Which of the following will cause aggregate supply to decrease?

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Question 6 6. What is the formula for the multiplier effect?

Question 7 7. What is the marginal propensity to consume?

Question 8 8. In the Classical model, what shape is the aggregate supply curve?

Question 9 9. Labor supply is the total hours that workers or employees are willing to work at a given _____.

Question 10 10. 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?

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Question 11 11. What does the term 'sticky prices' mean?

Question 12 12. How do technological advancements affect aggregate supply, all else constant? Why?

Question 13 13. The image shows two aggregate supply curves. Which of the following statements accurately describes the two curves?

Question 14 14. What do classical economists believe?

Question 15 15. What is the amount of extra income that is spent on the consumption of goods and services?

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Question 16 16. In the Classical model, how does a vertical aggregate supply curve affect other economic drivers?

Question 17 17. Why is the income tax relevant to the federal government?

Question 18 18. According to Keynes, which of the following is a big determinant of the level of consumption in an economy?

Question 19 19. Which of the following statements is true regarding changing economic conditions?

Question 20 20. Which of the following factors does NOT cause a shift in the overall labor supply?

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Question 21 21. The portion of extra income that is consumed on goods and services is known as what?

Question 22 22. Susan's income last year was $100,000, but it is $105,000 this year. Last year she spent $95,000, but this year she spent $98,000. What's her MPC?

Question 23 23. What did Keynes believe?

Question 24 24. The _____ Model more accurately describes economic growth in the _____.

Question 25 25. Which of the following is true of wages and prices in the Keynesian Model?

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Question 26 26. What is the formula for MPC?

Question 27 27. Why is the LRAS curve vertical?

Question 28 28. Which of the following is NOT one of the ways that marginal propensity to consume affects the economy?

Question 29 29. What is the Y axis of the AS AD curve?

Question 30 30. Why can crowding out have a strong impact on the economy?

Aggregate Demand and Supply 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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