Chapter 11 Review questions Questions: 1. The accumulation demand curve: A) is upsloping because a greater price level is important to do production profitable as production prices rise. B) is downsloping since production costs decrease as actual output increases. C) reflects the amount of expenditures required to induce the manufacturing of each possible level of real output. D) shows the lot of actual output that will certainly be purchased at each feasible price level. 2. The aggregate demand curve is: A) upright if complete employment exists. B) horizontal once there is substantial unemployment in the economy. C) downsloping because of the interest-rate, real-balances, and also foreign purchase effects. D) downsloping due to the fact that production prices decrease as actual output rises. 3. The interest-rate and real-balances impacts are important due to the fact that they help explain: A) rightward and also leftward shifts of the aggregate demand curve. B) why fiscal policy cannot be used successfully to curb inflation. C) the form of the aggregate demand curve. D) the shape of the accumulation supply curve. 4. The foreign purchases effect suggests that an increase in the U.S. Price level relative to other countries will: A) increase the amount of U.S. Actual output purchased. B) increase U.S. Imports and decrease U.S. Exports. C) rise both U.S. Imports and also U.S. Exports. D) to decrease both U.S. Imports and U.S. Exports. 5. The accumulation supply curve: A) is explained by the attention rate, real-balances, and foreign to buy effects. B) it s okay steeper as the economic climate moves indigenous the optimal of the curve to the bottom that the curve. C) shows the various amounts of genuine output that businesses will develop at every price level. D) is downsloping since real purchase power boosts as the price level falls. 6. The accumulation supply curve (short-run): A) slopes downward and also to the right. B) graphs together a upright line. C) slopes upward and also to the right. D) graphs as a horizontal line.1|PageChapter 11 evaluation Questions7. In the above diagram, a change from AS1 to AS3 could be caused by a(n): A) boost in productivity. B) boost in the price of imported resources. C) decrease in the price of residential resources. D) to decrease in company taxes. 8. In the over diagram, a shift from AS1 to AS2 might be caused by a(n): A) rise in sector power of resource sellers. B) increase in the prices of imported resources. C) to decrease in the price of domestic resources. D) boost in service taxes. 9. In the above diagram, a shift from AS3 come AS2 could be led to by an increase in: A) business taxes and government regulation. B) the prices of imported resources. C) the price of domestic resources. D) productivity.2|PageChapter 11 testimonial Questions10. Describe the over diagrams, in i m sorry AD1 and also AS1 are the "before" curves and also AD2 and also AS2 are the "after" curves. A recession is depicted by: A) dashboard (A) only. B) panel (B) only. C) dashboard (C) only. D) panels (A) and also (B). 11. If aggregate demand decreases, and also as a result, real output and also employment decrease but the price level remains unchanged, we can assume that: A) the money supply has actually declined. B) the price level is inflexible downward and a recession has actually occurred. C) cost-push inflation has actually occurred. D) productivity has declined. 12. A rightward shift of the ad curve in the very steep upper part of the upsloping together curve will: A) rise real output by much more than the price level. B) rise the price level by much more than genuine output. C) reduce real output by more than the price level. D) mitigate the price level by an ext than actual output. 13. A rightward shift of the advertisement curve in the very flat component of the upsloping as curve will: A) rise real calculation by much more than the price level. B) increase the price level by much more than actual output. C) minimize real output by more than the price level. D) alleviate the price level by an ext than actual output.3|PageChapter 11 testimonial QuestionsAnswers: 1. D 2. C 3. C 4. B 5. C 6. C 7. B 8. C 9. D 10. D 11. B 12.


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