Macroeconomic Model And Economic Concepts

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Macroeconomic Model and Economic Concepts Question 1: (1 point) Consider the basic AD/AS macro model. The simple multiplier is reflected by the (a) size of the rightward shift of the AD curve in response to a change in autonomous expenditure. (b) upward movement along the AD curve in response to a change in autonomous expenditure. (c) downward movement along the AD curve in response to a change in autonomous expenditure. (d) horizontal distance between initial macroeconomic equilibrium and the new intersection of AD and AS in response to a change in autonomous qu.23.expenditure. (e) size of the downward shift of the AD curve in response to a rise in autonomous expenditure. Question 2: (1 point) A leftward shift of the aggregate demand ( AD) curve could result from a rise in (a) government purchases. (b) desired investment. (c) the net tax rate. (d) government transfer payments to households. (e) desired exports. Question 3: (1 point) Suppose firms are currently producing output at a level beyond their normal capacity. In this situation, the AS curve will be relatively ________ and a qu.23.positive AD shock will result in ________. (a) flat; an equal increase in the price level and in real GDP. (b) steep; a decrease in the price level and a very small decrease in real GDP. (c) steep; an increase in the price level with a small increase in real GDP. (d) flat; a very small increase in prices but a large increase in real GDP.
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