AP Macroeconomics(Mods 17-21 Review)

Question 1

What is an example of expansionary fiscal policy?

Accepted Answer

Increasing gov spending to build highways

Question 2

If nominal wages fall, short-run aggregate supply will shift left.

Accepted Answer

False

Question 3

Automatic stabilizers would include taxes decreasing as GDP increases.

Accepted Answer

False

Question 4

An increase in gov't spending and purchases, an increase in wealth, and optimism for the future will shift the;

Accepted Answer

aggregate demand right

Question 5

In a recessionary gap, unemployment is raised.

Accepted Answer

True

Question 6

The Long run aggregate supply curve(LRAS) is vertical.

Accepted Answer

True

Question 7

Expansionary policies should be used during recessionary gaps and include increases in gov't spending and lower taxes.

Accepted Answer

True

Question 8

An increase in investments leads to _ in the price level and _in real GDP in the short run.

Accepted Answer

An increase, An increase

Question 9

Contardactionary policies shift the Demand Curve right

Accepted Answer

False

Question 10

Automatic stabilizers can do what?

Accepted Answer

Cause taxes to decrease and increase with GDP.

Question 11

Decreased taxes will cause a decrease in AD.

Accepted Answer

False

Question 12

When PL rises the quantity of output supply falls

Accepted Answer

Absolutley Wrong! quantity of output supply increases silly!

Question 13

If a sharp energy price increase occurs and gov't adopts a stabilization policy what will happen?

Accepted Answer

higher PL

Question 14

The LRAS does not have sticky wages.

Accepted Answer

True

Question 15

In an inflationary gap, wages will increase.

Accepted Answer

True

Question 16

Recessions will most likely be less severe if tax revenues and transfer payments automatically change in what ways?

Accepted Answer

Both

Question 17

Fiscal policy that increases Aggregate Demand

Accepted Answer

Expansionary

Question 18

How does the automatic adjustment move the economy to LRAS when experiencing an inflationary Gap?

Accepted Answer

Both of these answers

Question 19

Sticky Wages occur in the long run.

Accepted Answer

Nope, they occur in the short run.

Question 20

What happens if the Gov't spends more than what si required to fix a recessionary gap?

Accepted Answer

Inflation

Question 21

Decreases in energy prices does not effect supply

Accepted Answer

False

Question 22

An inflationary gap will be closed in the long run by increased wages and lowered supply(Shift left).

Accepted Answer

True

Question 23

The aggregate demand curve shows the relationship between the aggregate PL and aggregate output supplied.

Accepted Answer

True

Question 24

Aggregate Demand will Decrease if:

Accepted Answer

Government increases taxes

Question 25

John Maynard Keynes believes that;

Accepted Answer

government should try and reduce effects of recessions by fiscal policies

Question 26

In the long run, the aggregate PL does not affect the quantity of aggregate output.

Accepted Answer

True

Question 27

Increasing the amount of money in circulation shifts the:

Accepted Answer

Aggregate Demand Curve Right

Question 28

The level output in the long run is known as;

Accepted Answer

potential output

Question 29

In general, an increase in the PL, and nothing else, will cause;

Accepted Answer

An upward shift movement ALONG the Aggregate demand curve

Question 30

A change in commodity prices will shift the short run aggregate supply.

Accepted Answer

True

Question 31

If the Gov't increases spending on healthcare which will most likely occur?

Accepted Answer

The AD curve shifts right, output increases, and prices increase.

Question 32

The intersection of the SRAS and the AD curve occurs at the economy's equilibrium level of Real potential output and PL.

Accepted Answer

True

Question 33

The ______ shows the positive relationship between the aggregate PL and the Quantity of aggregate supplied.

Accepted Answer

short run aggregate supply curve

Question 34

The aggregate demand slopes downward b/c as PL falls quantity demanded rises.

Accepted Answer

True

Question 35

If the stock market crashes the demand curve will shift to the left.

Accepted Answer

True

Question 36

An increase in wealth or government spending will lead to what?

Accepted Answer

Shift right in the aggregate demand curve

Question 37

Government spending does not the aggregate demand.

Accepted Answer

False

Question 38

When the LRAS crosses the X-Axis this is known as:

Accepted Answer

Potential Output

Question 39

An inflationary gap means the economy is below potential output

Accepted Answer

False

Question 40

A recessionary Gap occurs if the actual GDP is less than the potential GDP

Accepted Answer

True

Question 41

When PL falls, the purchasing power of assets rises which leads to an increase in the quantity of output demanded.

Accepted Answer

True

Question 42

Select All that Apply: What happens if the fed decreases the amount of money in circulation?

Accepted Answer

Aggregate Demand Curve shifts left, Intrest rates increase, Decrease in investment

Question 43

Dylan is the best!

Accepted Answer

True

Question 44

The relationship between aggregate price level and quantity of aggregate output demanded is called:

Accepted Answer

Aggregate Demand

Question 45

To close an inflationary gap, use Contardactionary Fiscal Policy which increases taxes and lowers gov't spending.

Accepted Answer

True

Question 46

If the gov gets a rule that requires the gov to eliminate deficits or surpluses will then eliminate automatic stabilizer

Accepted Answer

True

Question 47

An inflationary gap will be eliminated due to a _ pressure on wages, causing the supply to _.

Accepted Answer

Upward, shift left

AP Macroeconomics(Mods 17-21 Review)

Questions 47

AP Macroeconomics(Mods 17-21 Review)

Questions 47