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ECON-1012-B-Introduction to Macroeconomics

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When the Bank of Canada fights recession by lowering the overnight rate, how do the supply of reserves and the supply of money change?

The supply of reserves ________ and the supply of money ________.
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Which of the following events deals with an open market operation?
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An economy's short-run macroeconomic equilibrium occurs at real GDP greater than potential GDP. In the long run the money wage rate adjusts. Which of the following events will occur?
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Short Description: A line graph of price level versus real G D P. Long Description: The vertical axis is labelled, price level (G D P deflator, 20 12 = 100) and ranges from 60 to 110 in increments of 10 with a kink near the origin. The horizontal axis is labelled, real G D P (billions of 20 12 dollars) and ranges from 450 to 700 in increments of 50 with a kink near the origin. The line for S A S is a concave up curve that slopes upward from the lower left corner to the upper right corner passing through the points (475, 60), (550, 70), and (600, 80). The line for A D slopes downward from the upper left corner to the lower right corner, passing through the points (550, 90), (600, 80), and (650, 70). The line for L A S is a vertical line from the point (550, 0) on the horizontal axis passing through the points (550, 70) and (550, 90).

Figure 10.3.2

Refer to Figure 10.3.2, which shows the AS-AD model, in which an economy is in short-run macroeconomic equilibrium. Which of the following statements (1) and (2) is correct and which is incorrect?

(1)The actual unemployment rate exceeds the natural unemployment rate in the short run. 
(2)As the economy adjusts to long-run equilibrium, the SAS curve automatically shifts rightward. 
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How does an increase in foreign income influence Canadian aggregate demand?
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Which of the following events will increase the economy's short-run aggregate supply of real GDP?
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Short Description: A graph of price level versus real G D P. Long Description: The vertical axis is labelled, price level (G D P deflator, 20 12 = 100) and ranges from 90 to 130 in increments of 10 with a kink near the origin. The horizontal axis is labelled, real G D P (trillions of 20 12 dollars) and ranges from 12.0 to 14.0 in increments of 0.50 with a kink near the origin. The line for S A S slopes upward from the lower left corner to the upper right corner passing through the points A (13.0, 100) and B (13.5, 110). The line for A D0 slopes downward from the upper left corner to the lower right corner, passing through the point A (13.0, 100). The line for A D1 slopes downward from the upper left corner to the lower right corner, parallel to the line for A D0 on the right and passing through the point B (13.5, 110).

Figure 10.3.4

Refer to Figure 10.3.4, which shows the AS-AD model. When the economy is at point B, which of the following situations exists?
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We observe a decrease in the price level and an increase in real GDP. Which of the following is a possible explanation?
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Short Description: A graph of price level versus real G D P. Long Description: The vertical axis is labelled, price level (G D P deflator, 20 12 = 100) and ranges from 60 to 110 in increments of 10 with a kink near the origin. The horizontal axis is labelled, real G D P (billions of 20 12 dollars) and ranges from 320 to 520 in increments of 40 with a kink near the origin. The line for S A S slopes upward from the lower left corner to the upper right corner passing through the points (340, 70) and (400, 85). The line for A D slopes downward from the upper left corner to the lower right corner, passing through the points (360, 100), (400, 85), and (440, 70). The line for L A S is a vertical line from the point (440, 0) on the horizontal axis passing through the point (440, 70).

Figure 10.3.1

Refer to Figure 10.3.1, which shows the AS-AD model in which an economy is in short-run macroeconomic equilibrium. When this economy automatically adjusts to long-run equilibrium, which of the following events occur?
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Table 10.3.2

The three columns of the table are titled Price level (2012 = 100), and real GDP demanded and real GDP supplied in trillions of 2012 dollars. The rows display the data as follows: 140; 4; 8130; 5; 7120; 6; 6110; 7; 5100; 8; 4

Refer to Table 10.3.2, which shows the aggregate demand and aggregate supply schedules. Potential GDP is $7 trillion. When the economy is at its short-run macroeconomic equilibrium, which of the following statements is correct?
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