Question

Question 5 of 10

The short-run aggregate supply curve implies that real output exceeds its long-run level when the price level is:

A. high

B. greater than the expected price level

C. low

D. less than the expected price level

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Question 6 of 10

In the aggregate demand-supply model, a short-run equilibrium occurs at the combination of output and prices where

A. aggregate demand equals long-run aggregate supply

B. short-run aggregate supply equals long-run aggregate supply

C. aggregate demand equals long-run and short-run aggregate supply

D. aggregate demand equals short-run aggregate supply

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Question 7 of 10

In the short-run, if the price level is greater than the expected price level, then in the long run the aggregate

A. short-run supply curve will shift upward

B. demand curve will shift rightward

C. short-run supply curve will shift downward

D. demand curve will shift leftward

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Question 8 of 10

Which of the following is an example of a demand shock

A. a drought that destroys agricultural crops

B. the introduction and greater availability of credit cards

C. a large oil-price increase

D. unions obtain a substantial wage increase

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Question 9 of 10

A favorable supply shock occurs when:

A. environmental protection laws raise costs of production

B. the FED increases the money supply

C. unions push wages up

D. an oil cartel breaks up and oil prices fall

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Question 10 of 10

If the FED accommodates an adverse supply shock, then output falls __________, but prices rise ________.

A. more; less

B. less; less

C. more; more

D. less; more

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