曼昆经济学题库chapter23.doc

Chapter 20/Aggregate Demand and Aggregate Supply F 559Chapter 23Aggregate Demand and Aggregate SupplyMULTIPLE CHOICE1.Which of the following explains why production rises in most years?a.increases in the labor forceb.increases in the capital stockc.increases in technologyd.All of the above are correct.ANSWER: d.All of the above are correct.TYPE: M DIFFICULTY: 1 SECTION: 20.02.On average over the past 50 years, the U.S. economy has grown at the rate of abouta.1 percent per year.b.3 percent per year.c.4 percent per year.d.6 percent per year.ANSWER: b.3 percent per year.TYPE: M DIFFICULTY: 1 SECTION: 20.03.A short period of falling incomes and rising unemployment is called aa.depression.b.recession.c.expansion.d.business cycle.ANSWER: b.recession.TYPE: M DIFFICULTY: 1 SECTION: 20.04.During recessionsa.workers are laid off.b.factories are idle.c.firms may find they are unable to sell all they produce.d.All of the above are correct.ANSWER: d.All of the above are correct.TYPE: M DIFFICULTY: 1 SECTION: 20.15.During a recession the economy experiencesa.rising employment and income.b.rising employment and falling income.c.rising income and falling employment.d.falling employment and income.ANSWER: d.falling employment and income.TYPE: M DIFFICULTY: 1 SECTION: 20.16.Business cyclesa.are easily predicted by competent economists.b.have never occurred very close together.c.can only be seen as changes in real GDP.d.None of the above is correct.ANSWER: d.None of the above are correct.TYPE: M DIFFICULTY: 1 SECTION: 20.17.Business cyclesa.are explained mostly by fluctuations in consumption.b.no longer are very important due to government policy.c.are fluctuations in real GDP and related variables over time.d.are easily predicted by competent economists.ANSWER: c.are fluctuations in real GDP and related variables over time.TYPE: M DIFFICULTY: 1 SECTION: 20.18.During recessionsa.sales and profits fall.b.sales and profits rise.c.sales rise, profits fits fall, sales rise.ANSWER: a.sales and profits fall.TYPE: M DIFFICULTY: 1 SECTION: 20.19.The decrease in real GDP during a recession isa.mostly a decrease in investment spending.b.mostly a decrease in consumption spending.c.about equally divided between consumption and investment spending.d.sometimes mostly a decrease in consumption and sometimes mostly a decrease in investment.ANSWER: a.mostly a decrease in investment spending.TYPE: M DIFFICULTY: 1 SECTION: 20.110.Which of the following typically rises during a recession?a.garbage collectionb.unemploymentc.corporate profitsd.automobile salesANSWER: b.unemploymentTYPE: M DIFFICULTY: 1 SECTION: 20.111.Most economists use the aggregate demand and aggregate supply model primarily to analyzea.short-run fluctuations in the economy.b.the effects of macroeconomic policy on the prices of individual goods.c.the long-run effects of international trade ductivity and economic growthANSWER: a.short-run fluctuations in the economy.TYPE: M DIFFICULTY: 1 SECTION: 20.112.Real GDPa.is the dollar value of all goods produced by the citizens of an economy within a given time measured in current year prices.b.measures economic activity and income.c.is used primarily to measure long-run trends in the economy.d.All of the above are correct.ANSWER: b.measures economic activity and income.TYPE: M DIFFICULTY: 2 SECTION: 20.113.Real GDPa.moves in the same direction as unemployment.b.is not adjusted for inflation.c.also measures income.d.All of the above are correct.ANSWER: c.also measures income.TYPE: M DIFFICULTY: 1 SECTION: 20.114.In a recession, compared to the percentage decline in GDP, investment spendinga.falls by a larger percentage.b.falls by about the same percentage as GDP.c.falls by a smaller percentage than GDP.d.falls but the percentage change is sometimes much larger and sometimes much smaller.ANSWER: a.falls by a larger percentage.TYPE: M DIFFICULTY: 2 SECTION: 20.115.Which part of real GDP fluctuates most over the course of the business cycle?ernment exportsANSWER: c.investmentTYPE: M DIFFICULTY: 1 SECTION: 20.116.In 2001, the United States was in recession. Which of the following things would you expect not to have happened?a.layoffs and firingsb.a higher rate of bankruptcyc.increased claims for unemployment insuranced.increased investment spendingANSWER: d.increased investment spendingTYPE: M DIFFICULTY: 1 SECTION: 20.117.Investment is aa.small part of real GDP, so it accounts for a small share of the fluctuation in real GDP.b.small part of real GDP, yet it accounts for a large share of the fluctuation in real GDP.c.large part of real GDP, so it accounts for a large share of the fluctuation in real GDP.d.large part of real GDP, yet it accounts for a small share of the fluctuation in real GDP.ANSWER: b.small part of real GDP, yet it accounts for a large share of the fluctuation in real GDP.TYPE: M DIFFICULTY: 1 SECTION: 20.118.Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these pairs. Which pair of GDP growth rates and unemployment rates is realistic?a.6 percent, 0 percentb.3 percent, 10 percentc.1 percent, 6 percentd.3 percent, 2 percentANSWER: c.1 percent, 6 percentTYPE: M DIFFICULTY: 1 SECTION: 20.119.In the last half of 1999, the U.S. unemployment rate was about 4 percent. Historical experience suggests that this isa.above the natural rate, so that real GDP growth was likely low.b.above the natural rate, so that real GDP growth was likely low.c.equal to the natural rate, so that real GDP growth was likely average.d.below the natural rate, so that real GDP growth was likely high.ANSWER: d.below the natural rate, so that real GDP growth was likely high.TYPE: M DIFFICULTY: 1 SECTION: 20.120.As recessions begin productiona.and unemployment both rise.b.rises and unemployment falls.c.falls and unemployment rises.d.and unemployment both fall.ANSWER: c.falls and unemployment rises.TYPE: M DIFFICULTY: 1 SECTION: 20.121.Which of the following is incorrect concerning the long run?a.Higher money supply growth leads to higher output growth.b.An unemployment rate of zero is unobtainable.c.Per-capita real GDP depends on productivity.d.An increase in the money supply raises the price level.ANSWER: a.Higher money supply growth leads to higher output growth.TYPE: M DIFFICULTY: 2 SECTION: 20.222.Theory concerning long-run economic performancea.is less controversial than theory concerning short-run economic fluctuations.b.and short-run economic fluctuations are equally controversial.c.is more controversial than theory concerning short-run economic fluctuations.d.and short-run economic fluctuations are not controversial.ANSWER: a.is less controversial than theory concerning short-run economic fluctuations.TYPE: M DIFFICULTY: 1 SECTION: 20.223.The classical dichotomy refers to the separation ofa.variables that move with the business cycle and variables that do not.b.changes in money and changes in government expenditures.c.endogenous and exogenous variables.d.real and nominal variables.ANSWER: d.real and nominal variables.TYPE: M DIFFICULTY: 1 SECTION: 20.224.According to classical economic theory, changes in the money supply affecta.nominal variables and real variables.b.nominal variables, but not real variables.c.real variables, but not nominal variables.d.neither nominal nor real variables.ANSWER: b.nominal variables, but not real variables.TYPE: M DIFFICULTY: 1 SECTION: 20.225.According to classical economic theory, changes in the money supply affecta.real GDP.b.real interest rates.c.the price level.d.All of the above are correct.ANSWER: c.the price level.TYPE: M DIFFICULTY: 2 SECTION: 20.226.Most economists believe that classical economic theory is a good description of the worlda.in neither the short nor long run.b.in the short run and in the long run.c.in the short run, but not in the long run.d.in the long run, but not in the short run.ANSWER: d.in the long run, but not in the short run.TYPE: M DIFFICULTY: 1 SECTION: 20.227.A model of short-run fluctuations focuses on the price level anda.real GDP.b.economic growth.c.the neutrality of money.d.All of the above are correct.ANSWER: a.real GDP.TYPE: M DIFFICULTY: 1 SECTION: 20.228.The overall price level is measured by thea.price of some particular commodity or service.b.rate of inflation.c.rate of deflation.d.CPI or the GDP deflator.ANSWER: d.CPI or the GDP deflator.TYPE: M DIFFICULTY: 1 SECTION: 20.229.The model of aggregate demand and aggregate supply explains the relationship betweena.the price and quantity of a particular good.b.unemployment and output.c.wages and employment.d.real GDP and the price level.ANSWER: d.real GDP and the price level.TYPE: M DIFFICULTY: 1 SECTION: 20.230.The variables on the vertical and horizontal axes of the aggregate supply and demand curve area.the price level, real output.b.real output, employment.c.employment, the inflation rate.d.the value of money, the price level.ANSWER: a.the price level, real output.TYPE: M DIFFICULTY: 1 SECTION: 20.231.Which of the sentences concerning the aggregate demand and aggregate supply model is correct?a.The aggregate demand and supply model is nothing more than a large version of the model of market demand and supply.b.The price level adjusts to bring aggregate demand and supply into balance.c.The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price.d.All of the above are correct.ANSWER: b.The price level adjusts to bring aggregate demand and supply into balance.TYPE: M DIFFICULTY: 1 SECTION: 20.232.Which of the following adjusts to bring aggregate supply and demand into balance?a.the price levelb.the real rate of interestc.the money supplyd.technologyANSWER: a.the price levelTYPE: M DIFFICULTY: 1 SECTION: 20.233.The aggregate demand curvea.slopes downward for the same reasons that market demand curves slope downward.b.is vertical in the long run.c.shows an inverse relation between the price level and the quantity of all goods and services demanded.d.All of the above are correct.ANSWER: c.shows an inverse relation between the price level and the quantity of all goods and services demanded.TYPE: M DIFFICULTY: 1 SECTION: 20.334.A fall in the economys overall level of prices tends toa.raise both the quantity demanded and supplied of goods and services.b.raise the quantity demanded of goods and services, but lower the quantity supplied.c.lower the quantity demanded of goods and services, but raise the quantity supplied.d.lower both the quantity demanded and the quantity supplied of goods and services.ANSWER: b.raise the quantity demanded of goods and services, but lower the quantity supplied.TYPE: M DIFFICULTY: 1 SECTION: 20.335.A rise in the economys overall level of prices tends toa.raise both the quantity demanded and supplied of goods and services.b.raise the quantity demanded of goods and services, but lower the quantity supplied.c.lower the quantity demanded of goods and services, but raise the quantity supplied.d.lower both the quantity demanded and the quantity supplied of goods and services.ANSWER: c.lower the quantity demanded of goods and services, but raise the quantity supplied.TYPE: M DIFFICULTY: 1 SECTION: 20.336.Which of the following is included in the aggregate demand for goods and services?a.consumption demandb.investment exportsd.All of the above are correct.ANSWER: d.All of the above are correct.TYPE: M DIFFICULTY: 1 SECTION: 20.337.Which of the following is not included in aggregate demand?a.purchases of stock and bondsb.purchases of services such as visits to the doctorc.purchases of capital goods such as equipment in a factoryd.purchases by foreigners of consumer goods produced in the United StatesANSWER: a.purchases of stock and bondsTYPE: M DIFFICULTY: 1 SECTION: 20.338.The effect of an increase in the price level is represented by aa.shift to the right of the aggregate demand curve.b.shift to the left of the aggregate demand curve.c.movement to the left along a given aggregate demand curve.d.movement to the right along a given aggregate demand curve.ANSWER: c.movement to the left along a given aggregate demand curve.TYPE: M DIFFICULTY: 1 SECTION: 20.339.The downward slope of the aggregate demand curve shows that an increase in thea.money supply causes the aggregate quantity of goods and services demanded to increase.b.money supply causes the aggregate quantity of goods and services demanded to decrease.c.price level causes the aggregate quantity of goods and services demanded to increase.d.price level causes the aggregate quantity of goods and services demanded to decrease.ANSWER: d.price level causes the aggregate quantity of goods and services demanded to decrease.TYPE: M DIFFICULTY: 1 SECTION: 20.340.Ceteris paribus, as the price level falls,a.the money supply erest rate rise.c.dollars become more valuable.d.the aggregate demand curve shifts right.ANSWER: c.dollars become more valuable.TYPE: M DIFFICULTY: 2 SECTION: 20.341.Ceteris paribus, as the price level rises, dollars becomea.more valuable, and interest rates rise.b.more valuable, and interest rates fall.c.less valuable, and interest rates rise.d.less valuable, and interest rates fall.ANSWER: c.less valuable, and interest rates rise.TYPE: M DIFFICULTY: 2 SECTION: 20.342.Ceteris paribus, as the price level falls, dollars becomea.more valuable, and interest rates rise.b.more valuable, and interest rates fall.c.less valuable, and interest rates rise.d.less valuable, and interest rates fall.ANSWER: b.more valuable, and interest rates fall.TYPE: M DIFFICULTY: 2 SECTION: 20.343.Ceteris paribus, as the price level falls, a countrys exchange ratea.and interest rates rise.b.and interest rates fall.c.fall and interest rates rise.d.rise and interest rates fall.ANSWER: b.and interest rates fall.TYPE: M DIFFICULTY: 2 SECTION: 20.344.Ceteris paribus, as the price level rises, exchange ratesa.and interest rates rise.b.and interest rates fall.c.fall and interest rates rise.d.rise and interest rates fall.ANSWER: a.and interest rates rise.TYPE: M DIFFICULTY: 2 SECTION: 20.345.Ceteris paribus, as the price level rises, the real value of moneya.and the exchange rate rise.b.and the exchange rate fall.c.rises and the exchange rate falls.d.falls and the exchange rate rises.ANSWER: d.falls and the exchange rate rises.TYPE: M DIFFICULTY: 2 SECTION: 20.346.An increase in the price level makes consumers feel less wealthy. As a result,a.aggregate demand shifts right.b.aggregate demand shifts left.c.there is a movement to right along a given aggregate demand curve.d.there is a movement to the left along a given aggregate demand curve.ANSWER: d.there is a movement to the left along a given aggregate demand curve.TYPE: M DIFFICULTY: 1 SECTION: 20.347.A decrease in the price level makes the dollars people hold wortha.more, so they spend more.b.more, so they spend less.c.less, so they spend more.d.less, so they spend less.ANSWER: a.more, so they spend more.TYPE: M DIFFICULTY: 1 SECTION: 20.348.An increase in the price level makes the dollars people hold wortha.more, so they spend more.b.more, so they spend less.c.less, so they spend more.d.less, so they spend less.ANSWER: d.less, so they spend less.TYPE: M DIFFICULTY: 1 SECTION: 20.349.People will spend more if the price levela.rises, making the dollars they hold worth more.b.rises, making the dollars they hold worth less.c.falls, making the dollars they hold worth more.d.falls, making the dollars they hold worth less.ANSWER: c.falls, making the dollars they hold worth more.TYPE: M DIFFICULTY: 1 SECTION: 20.350.People will spend more if real wealtha.and interest rates rise.b.rises and interest rates fall.c.falls and interest rates rise.d.and interest rates fall.ANSWER: b.rises and interest rates fall.TYPE: M DIFFICULTY: 1 SECTION: 20.351.If the price level rises, the value of moneya.rises while foreign exchange rates and interest rates rise.b.rises while foreign exchanger rates and interest rates fall.c.falls while foreign exchange rates and interest rate rise.d.falls while foreign exchange rates and interest rates fall.ANSWER: c.falls while foreign exchange rates and interest rate rise.TYPE: M DIFFICULTY: 2 SECTION: 20.352.If the price level falls, householdsa.increase foreign bond purchases, and the supply of dollars in the market for foreign-currency exchange increases.b.increase foreign bond purchases, and the supply of dollars in the market for foreign-currency exchange decreases.c.decrease foreign bond purchases, and the supply of dollars in market for foreign-currency exchange increases.d.decrease foreign bond purchases, and the sup