Exam. Name. The table below provides macroeconomic data for a hypothetical economy. Dollar amounts are all in constant-dollar terms.

Transcription

1 Exam Name 1) In macroeconomics, the term ʺnational incomeʺ refers to A) all sales of both current production and used goods. B) the value of the income generated by the production of total output. C) only those sales of currently produced goods sold to other nations. D) total current spending by all households. E) the value of a nationʹs total wealth. 2) Consider a small economy with 3 individuals where each individual produces $1000 worth of final goods and services. The national income for this economy is A) more than $3000 if some of the income is invested. B) less than $3000 if there are taxes in this economy. C) more than $3000 if the individuals are earning profits. D) $3000. E) less than $3000 if some of the income is saved. The table below provides macroeconomic data for a hypothetical economy. Dollar amounts are all in constant-dollar terms. Year Actual Output (billions of $) Potential Output (billions of $) Unemployment Rate ($ of labour force) TABLE ) Refer to Table In which years was this economy experiencing a recessionary gap? A) 2006, 2007, 2008 B) 2005, 2006 C) 2004, 2008 D) 2002, 2003, 2004 E) 2002, 2003, ) Suppose the city of Calgary has a population of 1 million, a labour force of , and employment equal to We can conclude that for legal and various other reasons people are excluded from the labour force. A) B) C) D) E)

2 5) Workers with marketable skills sometimes quit a job and become unemployed, with the expectation of soon finding a better job. This type of unemployment is called A) frictional unemployment. B) structural unemployment. C) overly-optimistic unemployment. D) cyclical unemployment. E) historical unemployment. 6) If the cyclical unemployment rate is negative, then the A) economy is operating at less than full employment. B) economy is operating beyond full employment. C) frictional unemployment rate is negative. D) frictional unemployment rate is greater than the structural unemployment rate. E) real-wage unemployment rate is negative. 7) Consider a small economy with real GDP of $1 billion and the total number of hours worked equal to 5 million. Which of the following is the best measure of labour productivity in this economy? A) real GDP per employed worker = $200 B) real GDP per hour worked = $20 C) real GDP per employed worker = $20 D) real GDP per hour worked = $200 E) indeterminable from the information provided. 8) Suppose an employer and its employees enter into a wage contract specifying a wage increase of 2 percent. But suppose that the price level rises by 3 percent over the course of the contract. In this case, A) the employeesʹ purchasing power will fall. B) the employer will experience a greater fall in purchasing power than would have occurred if the price level had held steady. C) both employer and employees will experience a loss of purchasing power. D) the employeesʹ purchasing power will rise. E) both employer and employees will benefit from increased purchasing power. 9) The group that tends to be most hurt by unexpected inflation is A) employers. B) individuals with unindexed pensions. C) banks. D) fixed-income earners. E) both B and D are correct. 10) Suppose that a price index for a certain basket of goods and services has a value of 150 in 2009 and a value of 156 in This index suggests that the cost of the market basket of goods and services A) was approximately the same in 2010 and B) was six percent lower in 2010 than in C) was six percent higher in 2010 than in D) was 156 percent higher in 2010 than in E) was four percent higher in 2010 than in ) If 0.75 U.S. dollars can be exchanged for one Canadian dollar, we say that the Canadian -U.S. exchange rate is A) B) C) D) 1.0. E) 75. 2

3 12) Total value added in an economy is equal to the value of A) all final goods produced. B) all final and intermediate goods produced. C) the sum of the value of primary, intermediate and final goods. D) all profits of all firms in the economy. E) all inputs and outputs in the economy. 13) Suppose a Canadian firm imports $5000 worth of frisbees from China and sells them for $ The effect on GDP would be A) to decrease the value of GDP by $ B) to increase the value of GDP by $ C) to increase the value of GDP by $ D) to increase the value of GDP by $5000. E) no effect on GDP since the frisbees were produced outside of Canada. 14) In Lumberville, the lumberjack cuts trees and sells them to the local mill for $500. The local mill processes these trees into wood planks and sells them to the carpenter for $800. Finally, the carpenter uses these wood planks to make tables which he sells for $1400 to Lumbervilleʹs residents. If we allowed double counting, the total value of Lumbervilleʹs output would be calculated as. But if we correctly compute the total value added, the value of the total output in Lumberville would be. A) $2200; $4200 B) $1400; $1400 C) $2700; $1400 D) $4200; $2700 E) $2200; $ ) GDP from the expenditure side is equal to the sum of A) Ca + Ia + net exports. B) Ca + Ia + Ga. C) Ca + Ia + Ga - net exports. D) Ca + Ia + Ga + (Xa - IMa). E) Ca + Ia + Ga + (IMa - Xa). 16) Which of the following statements regarding investment is correct? A) Depreciation refers to funds used to increase the existing stock of capital. B) The capital stock includes investment in stocks and bonds. C) The accumulation of inventories does not count as current investment. D) Rental payments are included as investment expenditures. E) Housing construction is classified as investment expenditure rather than consumption expenditure. 17) Suppose that in 2008, ABC Corporation produced $6 million worth of natural gas pipes but was able to sell only $5 million worth. Is the remaining $1 million of unsold pipes part of GDP for 2008? A) No, since they are added to existing inventories. B) Yes, since they are part of the economyʹs output in C) Yes, since changes in inventories are part of consumption expenditures. D) No, since they are part of the economyʹs output only when sold. E) No, since changes in inventories are part of actual investment. 18) When calculating GDP from the expenditure side, how do net exports enter the equation? A) They may or may not be included depending on whether they are for final or intermediate goods. B) They are included only if it is a positive number. C) They are included as a separate category. D) They are included but as part of C, I, or G. E) They are NOT included because they do not represent an expenditure by Canadians. 3

4 19) If a firmʹs depreciation exceeds its gross investment, then its A) capital stock will be shrinking. B) capital stock will be growing. C) depreciation cannot exceed gross investment. D) gross investment will be negative. E) net investment will be positive. 20) The principle difference between GDP and GNP is that GNP measures, while GDP measures. A) the total amount of income received by Canadian residents; the value of total output produced in Canada. B) total income generated by Canadians, both domestic and abroad; total income generated by Canadians, domestic only. C) wages and salaries, plus world-wide investment income received by Canadian residents; the value of total output produced in Canada. D) the value of total output produced by Canada; wages and salaries received by Canadian residents. E) total factor incomes in the economy; total expenditure in the economy. 21) Real GDP is equivalent to A) the money value of all goods and services produced in an economy per year plus imports. B) the nominal value of GNP multiplied by the GDP deflator. C) the market value of all goods and services produced in an economy per year. D) personal disposable income plus depreciation. E) the value of all goods and services produced in an economy per year adjusted for price changes. 22) If nominal GDP in some year is $3800 and the GDP deflator for the same year is 152, then the real GDP for that year is A) $3500. B) $5776. C) $3800. D) $2500. E) $ ) Statistics Canada excludes from GDP the value of goods and services exchanged ʺunder the counterʺ because A) satisfactory methods for their measurement have not been developed. B) these goods are all intermediate goods. C) their production has zero opportunity cost. D) Statistics Canada is responsible for making an ethical decision about which activities to exclude from national income measures. E) these goods do not contribute to well-being. 24) With respect to consumption, investment, government purchases and net exports, the national -income and product accounts measure A) both actual and desired expenditures, since actual expenditure must equal desired expenditure in each category. B) the flow of saving at any income. C) desired expenditures in each of the categories. D) neither actual nor desired expenditures. E) actual expenditures in each of the categories. 25) In a simple macro model, an increase in householdsʹ wealth is generally assumed to A) cause an upward shift in the aggregate consumption function. B) cause no change in desired consumption because consumption is a function of disposable income only. C) cause a downward shift in the aggregate consumption function. D) affect only desired saving, not desired consumption. E) cause no change in desired consumption because the increase is always expected. 4

5 26) The aggregate consumption function is based on the assumption that as real disposable income rises, aggregate desired consumption A) remains constant and desired saving will rise. B) and desired saving will both rise. C) will rise and desired saving will fall. D) will fall and desired saving will rise. E) remains constant and desired saving will fall. FIGURE ) Refer to Figure If disposable income is $3000, desired consumption expenditure is equal to A) $500. B) $2000. C) $1500. D) $0. E) $ ) Refer to Figure The APC will be equal to one (1.0) when disposable income is A) $0. B) $1000. C) $3000. D) $2000. E) not enough information to determine. 29) Refer to Figure Which of the following is the correct equation for the consumption function depicted in the figure? A) C = (0.5)YD B) C = (0.5)YD C) C = (2/3)YD D) C = (2/3)YD E) C = (2/3)YD 5

6 30) Refer to Figure The slope of the consumption function in the figure is equal to A) the average propensity to consume. B) the slope of the 45-degree line. C) the marginal propensity to save. D) the average propensity to save. E) the marginal propensity to consume. 31) On a graph of a consumption function, what is the significance of the 45-degree line? A) It connects all points where desired consumption equals desired expenditure. B) It shows the slope of the average consumption function, against which we measure other consumption functions. C) Desired consumption is zero at all points along the 45-degree line. D) It connects all points where desired consumption equals desired saving. E) It connects all points where desired consumption equals actual disposable income. Disposable Income Desired Consumption TABLE ) Refer to Table The marginal propensity to save is equal to A) 0.6. B) 0.8. C) 0.2. D) E) ) Aggregate desired consumption divided by aggregate disposable income is called the A) average propensity to save. B) average propensity to spend. C) average propensity to consume. D) total propensity to save. E) marginal propensity to save. 34) In a simple model of the economy, without government or taxes, a shock that causes an upward shift of the aggregate consumption function also causes shift of the saving function. A) a less-than-equal upward B) no C) an equal downward D) an equal upward E) a less-than-equal downward 6

7 FIGURE ) Refer to Figure If national income is Y1 and the aggregate expenditure function is AE1, then desired aggregate expenditure A) exceeds income and income will rise. B) exceeds income and income will fall. C) is less than income and income will fall. D) is equal to income and income will not change. E) is less than income and income will rise. 36) Consider the simplest macro model with demand-determined output, where AE = C + I. Suppose that actual national income is $900 billion and desired consumption plus desired investment is $920 billion. We can expect that A) firms will decrease autonomous investment by $20 billion until equilibrium national income is reached at $900 billion. B) firms will increase autonomous investment by $20 billion until equilibrium national income is reached at $920 billion. C) firms will see an increase in inventories, and they will respond by decreasing output, thereby decreasing actual national income. D) actual national income will decrease until equilibrium national income is reached at $900 billion. E) firms will see a decrease in inventories, and they will respond by increasing output, thereby increasing actual national income. 7

8 Consider the following information describing a closed economy with no government and where aggregate output is demand determined: TABLE the equilibrium condition is Y = C + I 2. the marginal propensity to save = the autonomous part of C is $30 4. investment is autonomous and is $40 37) Refer to Table The equilibrium level of national income will be A) $ 70. B) $ 93. C) $120. D) $160. E) $ ) Refer to Table At the equilibrium level of national income, desired consumption expenditure will be A) $ 30. B) $ 70. C) $110. D) $240. E) $ ) Consider a simple macro model with a constant price level and demand-determined output. Suppose the level of actual national income is less than desired aggregate expenditure. In this case, A) there will be no change in national income because only actual expenditure is relevant. B) national income will fall, because desired expenditures are less than actual expenditures. C) inventories will build up, causing national income to rise. D) shortages of goods and reductions in inventories will cause producers to increase output and national income to rise. E) national income may increase or decrease, depending on the relative sizes of the average propensity to consume and the average propensity to save. 40) The simple multiplier, which applies to short-run situations in which the price level is constant, describes changes in A) saving caused by changes in investment. B) investment induced by changes in equilibrium income. C) the equilibrium level of national income caused by changes in autonomous expenditure. D) employment induced by changes in equilibrium income. E) the rate of interest caused by increased demand for credit. 41) Consider a simple macro model with demand-determined output. In such a model, the smaller the marginal propensity to spend, the A) smaller the simple multiplier. B) smaller the MPS. C) larger is investment. D) larger the simple multiplier. E) larger the MPC. 8

9 Consider the following information describing a closed economy with no government. Aggregate output is demand determined and the price level is constant. TABLE Y = C + I 2. C = Y 3. I = ) Refer to Table This economyʹs equilibrium level of national income is A) 500. B) 600. C) 750. D) E) ) In a simple macro model, it is generally assumed that a countryʹs exports A) and imports are induced. B) are autonomous whereas imports are induced. C) are always equal to investment. D) and imports are autonomous. E) are induced whereas imports are autonomous. 44) The net export (NX) function crosses the horizontal axis at a level of national income where the A) X curve reaches the horizontal axis. B) IM curve reaches the horizontal axis. C) X and IM curves are at their farthest distance apart. D) X and IM curves intersect. E) X curve reaches its maximum. 45) An increase in foreign income, other things being equal, is assumed to cause the net export (NX) function to A) pivot downward. B) remain stationary. C) pivot upward. D) shift parallel downward. E) shift parallel upward. The table below shows national income and imports. The level of exports is fixed at $300. All figures (in table and questions) are in millions of dollars. Income (Y) Imports (IM) Net Exports (NX) a b c d TABLE ) Refer to Table What are the correct values for the level of net exports (a, b, c, and d) at each level of national income? A) a = -$150, b = -$50, c = $50, d = $150 B) a = $150, b = $250, c = $350, d = $450 C) a = $300, b = $300, c = $300, d = $300 D) a = $150, b = $50, c = -$50, d = -$150 E) not enough data to determine. 9

10 47) The AE function for an open economy with government can be written as A) AE = C + I + S + (X+IM). B) AE = C + I + G + (X-IM). C) AE = C + I + G - (X-IM). D) AE = C + I - G - (X+IM). E) AE = C + I - G + (X-IM). 48) Consider the simplest macro model with a constant price level and demand-determined output. The equations of the model are: C = Y, I = 150, G = 260, T = 0, X = 90, IM = 0.06Y. The marginal propensity to spend on national income, z, is. A) 0.06 B) 0.37 C) 0.43 D) 0.49 E) 0.63 FIGURE ) Refer to Figure The rotation from AE0 to AE1 could be caused by A) higher government purchases. B) a balanced budget. C) lower government purchases. D) a lower net tax rate. E) a higher net tax rate. 50) Consider a simple macro model with a constant price level and demand-determined output. The equations of the model are: C = Y, I = 400, G = 700, T = 0, X = 130, IM = 0.08Y. Desired consumption expenditure at equilibrium national income is. A) B) C) D) E)

11 51) Consider the following news headline: ʺMinister of Defence announces $2 billion purchase of fighter aircraft.ʺ Assuming that aggregate output is demand-determined, and that the aircraft are purchased domestically, what will be the effect of this action, all other things equal, on the AE function and equilibrium national income? A) the AE function will shift down parallel to itself and equilibrium national income will fall. B) the AE function will shift up parallel to itself and equilibrium national income will rise. C) the AE function will rotate upward (become steeper) and equilibrium national income will rise. D) there will be no change in the AE function or in equilibrium national income. E) the AE function will rotate downward (become flatter) and national income will fall. 52) A decrease in the value of the simple multiplier can be caused by A) an increase in the marginal propensity to spend. B) a decrease in the net tax rate. C) a decrease in the marginal propensity to import. D) an increase in the marginal propensity to consume. E) an increase in the marginal propensity to save. 53) Suppose aggregate output is demand determined. If the marginal propensity to spend is 0.5, and the MPC is 0.7, a $1 billion reduction in government purchases will cause equilibrium national income to by. A) increase; $2.00 billion B) decrease; $1.50 billion C) decrease; $2.00 billion D) increase; $3.33 billion E) decrease; $3.33 billion 54) Consider a simple macro model with government and foreign trade and where the price level is taken as given. The simple multiplier is equal to A) 1/(1- MPS - t). B) 1/MPC. C) 1/(1- (MPS(1 - t)- m )). D) 1/(1 - (MPC(1 - t)- m )). E) 1/(1-MPC). 11

12 FIGURE ) Refer to Figure Diagram 1 illustrates an economy that is experiencing a(n) gap. The goal of stabilization policy would be to national income until it is equal to. A) recessionary; increase; potential GDP. B) inflationary; reduce; potential GDP. C) inflationary; increase; potential GDP. D) recessionary; increase; actual national income. E) inflationary; reduce; actual national income. 56) Other things being equal, a rise in the domestic price level A) lowers the real value of all assets denominated in money units. B) makes domestic goods more attractive to foreigners. C) makes foreign goods less attractive to domestic residents. D) causes a decrease in real saving. E) raises the real burden of repaying a fixed money value debt. 57) Other things being equal, a rise in the price level will imply in wealth for the bondholder but in the wealth of the issuer of the bond. A) an increase; an increase B) a decline; an increase C) a decline; no change D) an increase; a decline E) a decline; a decline 12

13 58) Which of the following would likely cause an upward parallel shift in the AE curve and a rightward shift in the AD curve? A) an increase in the business confidence of firms B) a reduction in government purchases C) an increase in the MPC D) an increase in the price level E) a decrease in the price level FIGURE ) Refer to Figure Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V. The price level is P0. The corresponding point on the aggregate demand curve is point A) B. B) C. C) D. D) E. E) A. 13

14 60) Refer to Figure Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V. The price level is P0. Other things being equal, exogenous changes in the price level will cause A) shifts of the AE curve and movement along the aggregate demand curve AD0. B) no change in either the AE curve or the AD curve. C) movement along the aggregate expenditure curve AE0 and movement along the aggregate demand curve AD0. D) shifts of the AE curve and shifts of the AD curve. E) movement along the aggregate expenditure curve AE0 and shifts of the AD curve. 61) Consider a simple macro model with a given price level and demand-determined output. An exogenous change in the price level causes a A) movement along AE but does not affect the AD curve. B) movement along the AE curve and a shift in the AD curve. C) shift in the AE curve and a movement along the AD curve. D) movement along both the AE and AD curves. E) shift in both the AE and AD curves. 62) One reason why the aggregate demand (AD) curve slopes downward is that A) increases in the price level cause consumers to substitute foreign goods for domestic goods. B) when the price level falls consumers increase their saving rate. C) aggregate expenditure increases as the price level rises. D) when the price level falls firms must compete more when output increases. E) increased production results in lower production costs. 63) Aggregate supply refers to the A) total output firms wish to produce at each price level. B) decisions of firms to decrease inputs in order to produce outputs. C) effects of increases in input prices on output. D) economyʹs potential output at each possible labour force. E) supply of labour inputs in the economy. 64) In the short run, the aggregate supply curve has a positive slope because, as the price level rises, producers can A) be compensated for the extra costs incurred to produce more output. B) experience rising factor prices. C) accumulate inventories. D) produce the same output, but at higher prices. E) produce less in response to falling profits. 65) A movement along the economyʹs AS curve could be caused by a change in A) technology. B) labour productivity. C) the wage rate. D) the cost of capital. E) the price level, caused in turn by an AD shock. 14

15 66) The economyʹs AS curve will shift upward in the short run if there is A) a decrease in the cost of capital. B) an increase in the price level. C) an increase in labour productivity. D) an improvement in technology. E) an increase in the wage rate. 67) Consider the basic AD/AS model. If their unit costs rise as output increases, price-taking firms will be prepared to produce only if. A) more; prices increase B) more; the economy is in equilibrium C) more; prices decrease D) less; prices increase E) their current output; prices increase 68) If the economyʹs AS curve is upward sloping, a negative shock to aggregate demand will result in A) a decrease in both real GDP and prices. B) a decrease in prices but no change in real GDP. C) an increase in prices and no change in real GDP. D) an increase in real GDP and no change in prices. E) an increase in both real GDP and prices. 15

16 FIGURE ) Refer to Figure Which of the following statements best describes the supply side of Economy A? A) Firms are producing well below their capacity and are willing to produce more output with no increase in price. B) Firms are producing well below their capacity and are willing to produce more only if prices rise. C) Unit costs are rising, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level. D) Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase. E) Unit costs are rising, but firms are able to produce more output because there is excess capacity in the economy. 70) Refer to Figure Which of the following statements best describes the supply side of Economy B? A) Firms are producing well below their capacity and are willing to produce more output with no increase in price. B) Firms are producing well below their capacity and are willing to produce more only if prices rise. C) Unit costs are rising rapidly, but firms can produce more output by employing standby capacity and overtime labour, for example, with no increase in the price level. D) Firms are not able to produce more output because there is no excess capacity in the economy. E) Unit costs are rising rapidly as firms are producing beyond their capacity. Firms will produce more only if prices increase. 71) Suppose firms are currently producing output at a level beyond their normal capacity. In this situation, the AS curve will be relatively and a positive AD shock will result in. A) flat; a very small increase in prices but a large increase in real GDP. B) flat; an equal increase in the price level and in real GDP. C) steep; a decrease in the price level and a very small decrease in real GDP. D) steep; an increase in the price level with a small increase in real GDP. E) flat; a very small decrease in the price level and a decrease in real GDP. 16

17 72) In the basic AD/AS model, the effect of an aggregate demand shock is divided between a change in output and a change in the price level. How the effect is divided depends on the A) amount of inflation in the economy. B) position of the AE curve. C) slope of the AD curve. D) slope of the AS curve. E) size of the simple multiplier. 73) Aggregate supply shocks cause the price level and real GDP to change in A) opposite directions with price changing by less than output. B) opposite directions but by the same amount. C) the same direction with price changing by more than output. D) the same direction and by the same amount. E) opposite directions but not necessarily by the same amount. FIGURE ) Refer to Figure Suppose that an increase in government purchases by 50 causes the AD curve to shift to the right, as shown. The simple multiplier is and the multiplier is. A) 2.8; 1.2 B) 4; 2.8 C) 4; 1.2 D) 4; 3.2 E) 6;

18 Answer Key Testname: PRACTICEMTFALL10 1) B Topic: 19.1b. national output/national income 2) D Topic: 19.1b. national output/national income 3) E Topic: 19.1c. potential output and output gaps 4) C Topic: 19.1d. employment, unemployment and the labour force 5) A Topic: 19.1e. frictional, structural and cyclical unemployment 6) B Topic: 19.1e. frictional, structural and cyclical unemployment 7) D Topic: 19.1f. productivity 8) A Topic: 19.1g. inflation and the price level 9) E Topic: 19.1g. inflation and the price level 10) E Topic: 19.1g. inflation and the price level 11) C Topic: 19.1i. the exchange rate and depreciation/appreciation 12) A Topic: national output and value added 13) D Topic: national output and value added 14) C Topic: national output and value added 15) D Topic: 20.2a. GDP from the expenditure side 16) E Topic: 20.2a. GDP from the expenditure side 17) B Topic: 20.2a. GDP from the expenditure side 18) C Topic: 20.2a. GDP from the expenditure side 19) A Topic: 20.2a. GDP from the expenditure side 20) A Topic: 20.3a. GDP and GNP 21) E Topic: 20.3b. real/nominal GDP and the GDP deflator 22) D Topic: 20.3b. real/nominal GDP and the GDP deflator 18

19 Answer Key Testname: PRACTICEMTFALL10 23) A Topic: 20.3c. omissions from GDP 24) E Topic: 21.1a. desired vs. actual expenditures 25) A Topic: 21.1b. the consumption function 26) B Topic: 21.1b. the consumption function 27) B Topic: 21.1b. the consumption function 28) B Topic: 21.1b. the consumption function 29) A Topic: 21.1b. the consumption function 30) E Topic: 21.1b. the consumption function 31) E Topic: 21.1b. the consumption function 32) C Topic: 21.1c. average and marginal propensities to consume 33) C Topic: 21.1c. average and marginal propensities to consume 34) C Topic: 21.1d. the saving function 35) A Topic: 21.1f. the aggregate expenditure function (AE) 36) E Topic: equilibrium national income 37) E Topic: equilibrium national income 38) D Topic: equilibrium national income 39) D Topic: equilibrium national income 40) C Topic: 21.3b. the simple multiplier 41) A Topic: 21.3b. the simple multiplier 42) C Topic: 21.3b. the simple multiplier 43) B Topic: net export function 44) D Topic: net export function 19

20 Answer Key Testname: PRACTICEMTFALL10 45) E Topic: net export function 46) D Topic: net export function 47) B Topic: 22.3a. the AE function 48) B Topic: 22.3a. the AE function 49) D Topic: 22.3a. the AE function 50) D Topic: 22.3b. equilibrium national income 51) B Topic: 22.4a. changes in equilibrium national income 52) E Topic: 22.4b. the simple multiplier with taxes (t) and imports (m) 53) C Topic: 22.4b. the simple multiplier with taxes (t) and imports (m) 54) D Topic: 22.4b. the simple multiplier with taxes (t) and imports (m) 55) B Topic: 22.4c. fiscal policy 56) A Topic: 23.1a. effects of an exogenous change in the price level 57) B Topic: 23.1a. effects of an exogenous change in the price level 58) A Topic: 23.1b. relationship between AE and AD curves 59) A Topic: 23.1b. relationship between AE and AD curves 60) A Topic: 23.1b. relationship between AE and AD curves 61) C Topic: 23.1c. slope and shifts of the AD curve 62) A Topic: 23.1c. slope and shifts of the AD curve 63) A Topic: slope and shifts of the AS curve 64) A Topic: slope and shifts of the AS curve 65) E Topic: slope and shifts of the AS curve 66) E Topic: slope and shifts of the AS curve 20

21 Answer Key Testname: PRACTICEMTFALL10 67) A Topic: slope and shifts of the AS curve 68) A Topic: 23.3a. macroeconomic equilibrium 69) D Topic: 23.3a. macroeconomic equilibrium 70) A Topic: 23.3a. macroeconomic equilibrium 71) D Topic: 23.3b. AD shocks and AS shocks 72) D Topic: 23.3b. AD shocks and AS shocks 73) E Topic: 23.3b. AD shocks and AS shocks 74) C Topic: 23.3c. the multiplier when the price level varies 21