Aggregate Supply and Aggregate Demand

2. 13 Aggregate Supply and Aggregate Demand CLICKER QUESTIONS

3. Checkpoint 13.3 Checkpoint 13.1 Checkpoint 13.2 Question 1 Question 4 Question 7 Question 2 Question 5 Question 8 Question 6 Question 3 Question 9 Question 10

4. CHECKPOINT 13.1 Question 1 When the price level falls, ____________. • aggregate supply increases but potential GDP does not change • the quantity of real GDP supplied increases • aggregate supply decreases but potential GDP does not change • the quantity of real GDP supplied decreases • potential GDP and aggregate supply decrease

5. CHECKPOINT 13.1 Question 2 When potential GDP increases, _______. • the AS curve shifts rightward • there is a movement up along the AS curve • the AS curve shifts leftward • there is a movement down along the AS curve • there is neither a movement along or a shift in the AS curve

6. CHECKPOINT 13.1 Question 3 If the money wage rate rises, _______. • the AS curve shifts rightward • the quantity of real GDP supplied increases • the AS curve shifts leftward • the quantity of real GDP supplied decreases • neither the quantity of real GDP supplied nor aggregate supply change

7. CHECKPOINT 13.2 Question 4 The change in aggregate demand illustrated in the figure could have arisen because ____. • the quantity of money increased • foreign incomes decreased • the government raised taxes • the price level fell • firms’ expected profit to fall in the future

8. CHECKPOINT 13.2 Question 5 A change in any of the following factors except ____ changes aggregate demand. • expectations about the future • the money wage rate • monetary and fiscal policy • foreign income • the foreign exchange rate

9. CHECKPOINT 13.2 Question 6 When investment increases, the ____ in aggregate demand is ____ the change in investment. • increase; greater than • increase; smaller than • increase; the same as • decrease; the same as • decrease; greater than

10. CHECKPOINT 13.3 Question 7 If the quantity of real GDP supplied equals the quantity of real GDP demanded, then __________. • nominal GDP must equal real GDP • real GDP must equal potential GDP • real GDP must be greater than potential GDP • real GDP might be greater than, equal to, or less than potential GDP • real GDP must be less than potential GDP

11. CHECKPOINT 13.3 Question 8 If the economy is at full employment when investment increases, aggregate demand ____ and the economy is ________ of the business cycle. • decreases; in the expansion phase • increases; in the recession phase • decreases; in the recession phase • increases; moving toward the peak • decreases; moving toward the trough

12. CHECKPOINT 13.3 Question 9 The economy is at full employment. If aggregate demand increases, ______ gap arises. To adjust toward full employment _____. • an inflationary; the AS curve shifts leftward as the money wage rate rises • an inflationary; the AD curve shifts leftward as prices rise • an inflationary; potential GDP increases to close the gap • a recessionary; the AS curve shifts leftward as the money wage rate falls • a recessionary; the AS curve shifts leftward as the money wage rate rises

13. CHECKPOINT 13.3 Question 10 If the price of oil rises, the _______, the price level ______, and real GDP _______. • AD curve shifts rightward; rises; increases • AS curve shifts leftward; rises; decreases • AD curve and the AS curve shift leftward; rises; decreases • AD curve and the AS curve shift rightward; rises; decreases • AS curve shifts leftward; rises; increases