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Fresh Grad Lands Job as Real Estate Agent With Help from Professional Writers

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Module 6 Quiz

Navigation   » List of Schools  »  West Los Angeles College  »  Economics  »  Econ 002 – Principles of Macroeconomics  »  Winter 2021  »  Module 6 Quiz

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Below are the questions for the exam with the choices of answers:

Question #1
If real GDP is less than potential GDP then
A  he unemployment rate is at the natural rate and price levels are lowering
B  the unemployment rate is low and prices levels are rising.
C  the unemployment rate is high and price levels are stable.
Question #2
If the aggregate supply increases, the ________.
A  price level in an economy rises
B  price level in an economy falls
C  real GDP decreases
Question #3
An AD/AS model that shows the equilibrium in a flat section of the aggregate supply curve suggests
A  potential GDP is being met.
B  the economy is in recession.
C  potential GDP is being exceeded.
Question #4
In the AS-AD model, cyclical unemployment occurs when
A  the economy is not at a short run equilibrium in the AS-AD model.
B  actual GDP falls below potential real GDP in the equilibrium of the AD and short-run AS curves.
C  aggregate supply increases.
Question #5
What term is used to describe the maximum quantity that an economy can produce, in the context of its existing inputs, market and legal institutions?
A  potential GDP
B  aggregate supply
C  GDP deflator
Question #6
The term “full employment GDP” is synonymous with which of the following?
A  macroeconomic equilibrium
B  potential GDP
C  aggregate GDP
Question #7
In the AS-AD model depicting economic growth, the vertical line that represents potential GDP will
A  shift to the right in the long run AD curve.
B  gradually shift to the right in the long run.
C  gradually shift to the left in the long run.
Question #8
If equilibrium occurs in the flat range of the AS curve, then the:
A  price level is not stable.
B  economy is experiencing unemployment.
C  economy is producing at its potential GDP.
Question #9
Which component of aggregate demand would initially be affected by a change in exchange rates?
A  government spending
B  consumption
C  net exports
Question #10
If the government saw that consumer confidence was low, what step can it take to shift the AD to the right?
A  The Federal Reserve can increase interest rates.
B  Government can decrease its spending.
C  Congress can pass tax cuts.
Question #11
Which of the following descriptions reflects the AD-AS model most accurately?
A  Real GDP is shown on the vertical axis and the price level is shown on the horizontal axis.
B  Real GDP is shown on the horizontal axis and price level is shown on the vertical axis.
C  Aggregate supply is shown on the horizontal axis and aggregate demand is show on the vertical axis.
Question #12
Events that can cause a shift in the aggregate demand might include
A  loss of consumer confidence.
B  technological innovation.
C  production inputs.
Question #13
What accurately describes the AD-AS model?
A  Price level is shown on the vertical axis and real GDP is shown on the horizontal axis.
B  Aggregate demand is show on the vertical axis and aggregate supply is shown on the horizontal axis.
C  Real GDP is shown on the vertical axis and the price level is shown on the horizontal axis.
Question #14
The economic model of aggregate demand curve and aggregate supply curve helps explain the
A  expansion and contractions in individual markets.
B  shifts in real GDP and the price level.
C  three goals of economic policy which are economic growth, high inflation, and full employment.
Question #15
Aggregate supply curves, for high levels of output, are ________ and ________ for low levels of output.
A  relatively steep; remain steep
B  relatively steep; relatively flat
C  relatively flat; remain flat
Question #16
A decrease in aggregate demand (AD) can cause
A  an expansion in the economy.
B  a decrease in cyclical unemployment.
C  a recession in the economy.
Question #17
Aggregate Demand (AD) is defined as C + I + G + (X-M). I refers to ________.
A  investment spending
B  industry
C  interest rates
Question #18
As interest rates rise, the effect on aggregate demand is to
A  increase firm borrowing and investment spending.
B  reduce consumer borrowing and consumption spending.
C  increase consumer borrowing and saving.
Question #19
How does an economist depict cyclical unemployment on an aggregate demand-aggregate supply (AD-AS) diagram?
A  By depicting the duration of the recession on the diagram.
B  Showing how close the economy is to potential or full employment level of GDP.
C  By depicting how much the AD curve has moved past potential or full employment.
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Manush
Fresh Graduate
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