The determinants of aggregate supply

include resource prices and resource productivity.

Contractionary fiscal policy is so named because it

is aimed at reducing AD and thusachieving price stability.

An increase in input productivity will

reduce the equilibrium PL, assuming downward flexible prices

A decline in business investment (I) will shift the AD curve to the

left by a multiple of the change in investment.

Which of the following fiscal actions would be the most effective in fighting inflation?

creating a budget surplus and impounding that surplus

The equilibrium price level and level of real output occur where

the aggregate demand and supply curvesintersect.

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AP Macro Unit 3 Quiz

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Answers

1
A nation starts with a balanced budget and then uses expansionary fiscal policy - what results?
budget shortage
balanced budget
budget deficit
budget surplus
2
The determinants of aggregate supply
explain why real output and the PL are directly related.
are C and I and G and X less M.
explain the three distinct ranges of the AS curve.
include resource prices and resource productivity.
3
The economy's long-run aggregate supply curve
is vertical.
slopes upward and to the right.
slopes downward and to the right.
is horizontal.
4
Contractionary fiscal policy is so named because it
necessarily reduces the size of government.
is expressly designed to contract real GDP.
involves a contraction of the nation's moneysupply.
is aimed at reducing AD and thusachieving price stability.
5
An increase in input productivity will
reduce aggregate demand
shift the aggregate supply curve leftward
reduce the equilibrium PL, assuming downward flexible prices
reduce the equilibrium real output
6
A decline in business investment (I) will shift the AD curve to the
left by the same amount as the change ininvestment.
left by a multiple of the change in investment.
right by the same amount as the change ininvestment.
right by a multiple of the change in investment.
7
Graphically, cost-push inflation is shown as a
rightward shift of the AD curve.
leftward shift of AS curve.
rightward shift of the AS curve.
leftward shift of the AD curve.
8
An appropriate fiscal policy for severe demand-pull inflation is
a tax rate increase.
an increase in government spending.
depreciation of the dollar.
a reduction in interest rates.
9
Which of the following fiscal actions would be the most effective in fighting inflation?
creating a budget surplus, used toretire household debt
creating a budget surplus and impounding that surplus
creating a budget surplus, used to retire public debt
creating a budget deficit by borrowing from the public
10
The equilibrium price level and level of real output occur where
the price level is at its lowest level.
the aggregate demand and supply curvesintersect.
export equal imports.
real output is at its highest possible level.
11
Which one of the following would not shift the aggregate demand curve?
an increase in personal income tax rates
depreciation of the international value of thedollar
a change in the price level
a decline in the interest rate at each possibleprice level

AP Macro Unit 3 Quiz Flashcards | StudBud