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ECON 1010 Study Guide - Final Guide: Aggregate Supply, Pearson Education, Aggregate DemandExam


Department
Economics
Course Code
ECON 1010
Professor
Edward Haltrecht
Study Guide
Final

This preview shows pages 1-3. to view the full 40 pages of the document.
Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 1023
Chapter 26 Aggregate Supply and Aggregate Demand
26.1 Aggregate Supply
Use the figure below to answer the following questions.
Figure 26.1.1
1) Refer to Figure 26.1.1. Which graph illustrates what happens when factor prices decrease?
A) (a)
B) (b)
C) (c)
D) (d)
E) (a) and (b)
Answer: A
Diff: 2 Type: MC
Topic: Aggregate Supply
Source: Study Guide

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 1024
2) Refer to Figure 26.1.1. Which graph illustrates what happens when factor prices rise?
A) (a)
B) (b)
C) (c)
D) (d)
E) (a) and (b)
Answer: B
Diff: 2 Type: MC
Topic: Aggregate Supply
3) Which one of the following newspaper quotations describes a movement along an LAS curve?
A) "The decrease in consumer spending may lead to a recession."
B) "The increase in consumer spending is expected to lead to inflation, without any increase in
real GDP."
C) "Recent higher wage settlements are expected to cause higher inflation this year."
D) "Growth has been unusually high the last few years due to more women entering the labour
force."
E) "The recent tornadoes destroyed many factories in Calgary and Edmonton."
Answer: B
Diff: 3 Type: MC
Topic: Aggregate Supply
4) Which one of the following newspaper quotations describes a shift of only the SAS curve?
A) "The decrease in consumer spending may lead to a recession."
B) "The increase in consumer spending is expected to lead to inflation, without any increase in
real GDP."
C) "Recent higher wage settlements are expected to cause higher inflation this year."
D) "Growth has been unusually high the last few years due to more women entering the work
force."
E) "The recent tornadoes destroyed many factories in Calgary and Edmonton."
Answer: C
Diff: 2 Type: MC
Topic: Aggregate Supply
5) Which one of the following newspaper quotations describes a rightward shift of the LAS
curve?
A) "The decrease in consumer spending may lead to a recession."
B) "The increase in consumer spending is expected to lead to inflation, without any increase in
real GDP."
C) "Recent higher wage settlements are expected to cause higher inflation this year."
D) "Growth has been unusually high the last few years due to more women entering the work
force."
E) "The recent tornadoes destroyed many factories in Calgary and Edmonton."
Answer: D
Diff: 2 Type: MC
Topic: Aggregate Supply

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Parkin/Bade, Economics: Canada in the Global Environment, 8e
Copyright © 2013 Pearson Canada Inc. 1025
6) Which one of the following newspaper quotations describes a leftward shift of the LAS curve?
A) "The decrease in consumer spending may lead to a recession."
B) "The increase in consumer spending is expected to lead to inflation, without any increase in
real GDP."
C) "Recent higher wage settlements are expected to cause higher inflation this year."
D) "Growth has been unusually high the last few years due to more women entering the work
force."
E) "The recent tornadoes destroyed many factories in Calgary and Edmonton."
Answer: E
Diff: 2 Type: MC
Topic: Aggregate Supply
7) Which of the following does not change short-run aggregate supply?
A) a change in the money wage rate
B) technological change
C) a change in the full-employment quantity of labour
D) an increase in the quantity of capital
E) a change in expected future profits
Answer: E
Diff: 2 Type: MC
Topic: Aggregate Supply
8) Complete the following sentence. Potential GDP
A) increases as the price level rises.
B) is the level of real GDP when unemployment is zero.
C) increases as the quantity of money in the economy increases.
D) does not vary with the price level.
E) never changes.
Answer: D
Diff: 2 Type: MC
Topic: Aggregate Supply
9) A vertical long-run aggregate supply curve indicates that
A) an increase in the price level will not expand an economy's output in the long run.
B) output rates greater than the long-run output rate are unattainable.
C) an increase in the price level will permit the economy to achieve a higher level of output.
D) an increase in the price level will increase technological change and economic growth.
E) the long-run aggregate supply curve never shifts.
Answer: A
Diff: 2 Type: MC
Topic: Aggregate Supply
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