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Aggregate Demand & 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!

Page 1

Question 1 1. Which model of economic growth more accurately describes economic growth in the long-run?

Question 2 2. 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 3 3. Which best defines aggregate supply in the short-run?

Question 4 4. Which of the following is an example of a budget surplus?

Question 5 5. As income rises from $50,000 to $60,000, consumption increases from $40,000 to $48,000. In this case, what is the MPC?

Page 2

Question 6 6. Which of the following is true about business expenses and business taxes?

Question 7 7. In the Keynesian model, what is the orientation of the aggregate supply curve?

Question 8 8. Which of the following most accurately describes the difference between the short-run aggregate supply curve and the long-run aggregate supply curve?

Question 9 9. Which of the following statements is NOT true regarding the marginal propensity to save?

Question 10 10. Why can sticky wages and sticky prices be problematic?

Page 3

Question 11 11. Which is the best description of the short-run aggregate supply curve?

Question 12 12. Labor supply is the total hours that workers or employees are willing to work at a given _____.

Question 13 13. Prices in the economy can be sticky because of things like _____

Question 14 14. Which of the following correctly describes the curves in the AS/AD Model?

Question 15 15. Which of the following can increase aggregate supply?

Page 4

Question 16 16. What does the term 'sticky prices' mean?

Question 17 17. Which of the following BEST describes crowding out?

Question 18 18. What do you need to calculate in order to determine the marginal propensity to consume?

Question 19 19. Which of the following factors does NOT cause a shift in the overall labor supply?

Question 20 20. An upward sloping SRAS curve and a vertical LRAS reflect the fact that:

Page 5

Question 21 21. The short-run effects of an unfavorable oil shock would likely include which of the following?

Question 22 22. 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 23 23. What does it mean when the demand for labor shifts to the right?

Question 24 24. According to the AS/AD Model, what happens to real GDP, prices, and unemployment when Consumption increases?

Question 25 25. What is the total number of worker hours that firms are willing to incur at given wage levels?

Page 6

Question 26 26. In the Classical model, what shape is the aggregate supply curve?

Question 27 27. Aggregate supply is defined as the total amount of goods and services that are _____.

Question 28 28. Aggregate supply is composed of which of the following?

Question 29 29. 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 30 30. When there is an unexpected increase in the world supply of oil, the Real GDP will _____.

Aggregate Demand & 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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