Download MACROECONOMICS SESSION 4

MACROECONOMICS SESSION 4
QUESTIONS
THE AGGREGATE MARKET
1: The aggregate market model measures real production with __________ and the
price level with __________.
(A) nominal GDP, the CPI
(B) real GDP, the CPI
(C) real GDP, the GDP price deflator
(D) nominal GDP, the unemployment rate
(E) national income, the GDP price deflator.
2: If the aggregate market is in equilibrium, then:
(A) nothing changes.
(B) the price level rises.
(C) the price level falls.
(D) real GDP increases.
(E) real GDP decreases.
3: A short-run aggregate market equilibrium is likely to have disequilibrium in the:
(A) financial markets.
(B) product markets
(C) output markets.
(D) factor markets.
(E) long-run aggregate market.
4: If the price level is above the equilibrium price level in the long-run aggregate
market:
(A) the economy is at full-employment real production.
(B) aggregate supply exceeds aggregate demand.
(C) aggregate supply is equal to aggregate demand.
(D) the price level falls and aggregate expenditures rise.
(E) the price level rises and aggregate expenditures fall.
5: The intersection of the AD and SRAS curves:
(A) is the long-run equilibrium.
(B) creates financial market shortages.
(C) creates financial market surpluses.
(D) does not guarantee equilibrium in the product markets.
(E) does not guarantee equilibrium in the resources markets.
6: In the aggregate market has a recessionary gap then:
(A) long-run equilibrium is equal to full employment.
(B) real production is less than full employment.
(C) real production is probably high or rising.
(D) the unemployment rate is probably low or falling.
(E) the inflation rate is probably high or rising.
7: In the aggregate market has an inflationary gap then:
(A) real production is probably low or falling.
(B) the unemployment rate is probably high or rising.
(C) long-run equilibrium is equal to full employment.
(D) the inflation rate is probably low or falling.
(E) real production is greater than full employment.
8: Self-correction of the aggregate market from the short run to the long run results
from:
(A) changes in fiscal policy.
(B) changes in monetary policy.
(C) shifts of the SRAS curve.
(D) shifts of the LRAS curve.
(E) shifts of the AD curve.
9: A leftward shift of the SRAS curve is the mechanism that automatically:
(A) closes an inflationary gap.
(B) closes a recessionary gap.
(C) enacts fiscal policy.
(D) enacts monetary policy.
(E) decreases the price level.
10: The time required to move from the short run to the long run is:
(A) about 1 month.
(B) about 6 months.
(C) exactly 1 year.
(D) exactly 4 years.
(E) dependent on how much the price needs to change.