Captulo 1: Introduction

1
CORRECT

Which of the following is NOT an issue in macroeconomics?

A)
B)
C)
D)

2
CORRECT

issues relating to the balance of payment

the determination of prices in the agricultural sector
the relationship between inflation and unemployment
the possible effect of budget deficit increases on the level of investment

In the very long run

the position of the AD-curve depends on the productive capacity of the
A) economy
the position of the AS-curve depends on the degree of consumer
B) confidence
C)

the position of the AS-curve essentially determines the level of output

the position of the AD-curve is affected by changes in efficiency

D) improvements

3
CORRECT

The position of the long-run AS-curve is determined by

A)
B)
C)
D)

4
CORRECT

the full-employment level of output

consumer confidence
fiscal policy
monetary policy

In the very short run

A)

the position of the AD-curve determines the level of output

the position of the AD-curve cannot be changed by fiscal or monetary

B) policy

a change in monetary policy will affect both the price level and the level
C) of output
D)

5
CORRECT

a change in fiscal policy will not change the level of output

In the very short run

the level of prices can change quite rapidly, but the level of output is
A) fixed
B)

the level of prices is unaffected by the level of output

the level of prices and the level of output change with a shift in aggregate
C) demand
D)

6
CORRECT

In the medium run, restrictive fiscal policy will cause

A)
B)
C)
D)

7
CORRECT

the level of prices and the level of output are both fixed

a decrease in the level of output but no change in the level of prices

a decrease in the level of prices but no change in the level of output
a decrease in both the level of prices and the level of output
a decrease in real GDP with no change in nominal GDP

In the medium run, monetary policy can be used to

shift the AD-curve, but this will only result in a price change, not in a
A) change in real GDP
B)
C)

affect nominal GDP, but this will not have any effect on real GDP
lower the price level while increasing the level of real GDP

lower the price level but only at the cost of also lowering the level of real
D) GDP

8
CORRECT

Periods of very high inflation rates

A)
B)
C)
D)

9
CORRECT

can only occur in a situation when the AS-curve is vertical

most often are caused by sharp increases in aggregate demand
can only occur if the output gap is large
most often occur when actual GDP is less than potential GDP

The size of the output gap is determined by

A)
B)
C)

nominal GDP minus real GDP

potential GDP minus actual GDP
nominal GDP adjusted for inflation

actual output minus the output that could be produced if the capital stock
D) remained constant

10
CORRECT

If we assume that the AD-curve remains constant over time, we can expect
that
A)
B)
C)

the level of GDP will not change over time

the price level will not change over time
the price level will steadily decline over time

the level of both output and prices will vary greatly as the long run ASD) curve shifts unpredictably