(1A) Typically, if consumer and business confidence is falling then ________ and if consumer and business confidence is rising then ________.   (a) AD shifts to the right; AD shifts to the left (b) AD shifts to the left; AD shifts to the right (c) AD does not shift; AD shifts to the right   (1B) Consider the following table and identify equilibrium GDP. If the potential GDP is at 12.0, what can you conclude about price levels and the unemployment rate? Current Price Level Real GDP-quantity demanded per trillion Real GDP-quantity supplied per trillion 120 6.0 10.0 115 8.0 8.0 110 11.0 6.0 100 13.0 5.0     (A) The economy has stable price levels and low unemployment because it is operating above the potential GDP. (B) The economy has high unemployment but experiences stable price levels because the economy operates below the potential GDP. (C) The economy is experiencing rising price levels and has a low unemployment rate because it is operating above the potential GDP. (1C) What accurately describes the Aggregate Demand-Aggregate Supply (AD-AS) model?   (a)Real GDP is shown on the vertical axis and the price level is shown on the horizontal axis. (b)Price level is shown on the vertical axis and real GDP is shown on the horizontal axis. (c) Aggregate demand is shown on the vertical axis and aggregate supply is shown on the horizontal axis.     (1D) The relationship between the price level and the total quantity of output or real GDP firms will produce to sell is known as   (a)market supply. (b) aggregate supply. (c)aggregate demand.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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(1A) Typically, if consumer and business confidence is falling then ________ and if consumer and business confidence is rising then ________.

 

  • (a) AD shifts to the right; AD shifts to the left
    (b) AD shifts to the left; AD shifts to the right
    (c) AD does not shift; AD shifts to the right

 

(1B) Consider the following table and identify equilibrium GDP. If the potential GDP is at 12.0, what can you conclude about price levels and the unemployment rate?

Current Price Level

Real GDP-quantity demanded per trillion

Real GDP-quantity supplied per trillion

120

6.0

10.0

115

8.0

8.0

110

11.0

6.0

100

13.0

5.0

 

 


  • (A) The economy has stable price levels and low unemployment because it is operating above the potential GDP.

    (B) The economy has high unemployment but experiences stable price levels because the economy operates below the potential GDP.

    (C) The economy is experiencing rising price levels and has a low unemployment rate because it is operating above the potential GDP.


(1C) What accurately describes the Aggregate Demand-Aggregate Supply (AD-AS) model?

 

  • (a)Real GDP is shown on the vertical axis and the price level is shown on the horizontal axis.
    (b)Price level is shown on the vertical axis and real GDP is shown on the horizontal axis.
    (c) Aggregate demand is shown on the vertical axis and aggregate supply is shown on the horizontal axis.

 

 

(1D) The relationship between the price level and the total quantity of output or real GDP firms will produce to sell is known as

 

(a)market supply.
(b) aggregate supply.
(c)aggregate demand.

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