The short-run aggregate supply (SRAS) curve represents the relationship between
A) the price level and the real Gross Domestic Product (GDP) without full adjustment or full information.
B) the price level and the real Gross Domestic Product (GDP) without full adjustment but with full information.
C) the price level and the nominal Gross Domestic Product (GDP).
D) the decisions of producers and the decisions of consumers.
Ques. 2Public goods are desired because
A) people want and value them but the private sector will not make them available.
B) we want the government to spend our tax dollars.
C) they came in small units.
D) they make supply equal to demand for private goods.
Ques. 3A given supply curve illustrates
A) the relationship between price and quantity supplied.
B) the effect of a change in resource costs on quantity supplied.
C) the effect of a change in technology on quantity supplied.
D) the relationship between expected future prices and quantity supplied.
Ques. 4The demand curve for the product of a monopolistic competitor is
A) downward sloping.
B) horizontal.
C) vertical.
D) unitary elastic.
Ques. 5Suppose the market clearing price for gasoline is 3.75 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is 2.75 per gallon. Such a situation is an example of
A) a price control that will lead to a surplus of gasoline on the market.
B) a price floor that will lead to a shortage of gasoline on the market.
C) a price ceiling that will lead to a shortage of gasoline on the market.
D) a price floor that will lead to a surplus of gasoline on the market.
Ques. 6Suppose the economy is initially operating at full employment. A reduction in the size of the budget deficit will cause which of the following in the long run?
A) a recessionary gap
B) a reduction in real GDP
C) an inflationary gap
D) none of the above
Ques. 7Which of the following is a statement with positive economic analysis?
A) Lower wages increase employment and reduce the unemployment rate.
B) Slower money growth reduces inflation.
C) A reduction in the size of the budget deficit will reduce interest rates.
D) all of the above
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