4) When interest rates rise, A) borrowing costs increase, and total planned real expenditures decline. B) borrowing costs increase and total planned real expenditures increase. C) borrowing costs decline, and total planned real expenditures increase. D) borrowing costs decline, and total planned real expenditures decline. 5) The open economy effect suggests that A) a decrease in domestic price level will cause foreign residents to buy fewer domestic goods, increasing net exports. B) a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports. C) a rise in domestic price level will cause foreign residents to buy more domestic goods. D) a rise in domestic price level will cause domestic residents to buy fewer imported goods. 6) The aggregate demand curve shows A) a direct relationship between changes in the price level and changes in real GDP. B) real GDP does not change as the price level changes. C) an inverse relationship between the price level and real GDP. D) an inverse relationship between changes in the price level and changes in nominal GDP. 7) An aggregate demand curve A) shifts to the right when a non-price level change increases total planned real expenditures. B) shifts to the right when a non-price level change decreases total planned real expenditures. C) shifts to the right when the price level falls. D) does not shift to the right or to the left. 8) The short-run aggregate supply curve is a relationship between A) unemployment and real GDP. B) inflation and time. C) real GDP and price level. D) capital goods and consumer goods.
4) When interest rates rise, A) borrowing costs increase, and total planned real expenditures decline. B) borrowing costs increase and total planned real expenditures increase. C) borrowing costs decline, and total planned real expenditures increase. D) borrowing costs decline, and total planned real expenditures decline. 5) The open economy effect suggests that A) a decrease in domestic price level will cause foreign residents to buy fewer domestic goods, increasing net exports. B) a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports. C) a rise in domestic price level will cause foreign residents to buy more domestic goods. D) a rise in domestic price level will cause domestic residents to buy fewer imported goods. 6) The aggregate demand curve shows A) a direct relationship between changes in the price level and changes in real GDP. B) real GDP does not change as the price level changes. C) an inverse relationship between the price level and real GDP. D) an inverse relationship between changes in the price level and changes in nominal GDP. 7) An aggregate demand curve A) shifts to the right when a non-price level change increases total planned real expenditures. B) shifts to the right when a non-price level change decreases total planned real expenditures. C) shifts to the right when the price level falls. D) does not shift to the right or to the left. 8) The short-run aggregate supply curve is a relationship between A) unemployment and real GDP. B) inflation and time. C) real GDP and price level. D) capital goods and consumer goods.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4) When interest rates rise,
A) borrowing costs increase, and total planned real expenditures decline.
B) borrowing costs increase and total planned real expenditures increase.
C) borrowing costs decline, and total planned real expenditures increase.
D) borrowing costs decline, and total planned real expenditures decline.
5) The open economy effect suggests that
A) a decrease in domestic price level will cause foreign residents to buy fewer domestic goods,
increasing net exports.
B) a decrease in domestic price level will cause foreign residents to buy more domestic goods,
increasing net exports.
C) a rise in domestic price level will cause foreign residents to buy more domestic goods.
D) a rise in domestic price level will cause domestic residents to buy fewer imported goods.
6) The aggregate demand curve shows
A) a direct relationship between changes in the price level and changes in real GDP.
B) real GDP does not change as the price level changes.
C) an inverse relationship between the price level and real GDP.
D) an inverse relationship between changes in the price level and changes in nominal GDP.
7) An aggregate demand curve
A) shifts to the right when a non-price level change increases total planned real expenditures.
B) shifts to the right when a non-price level change decreases total planned real expenditures.
C) shifts to the right when the price level falls.
D) does not shift to the right or to the left.
8) The short-run aggregate supply curve is a relationship between
A) unemployment and real GDP.
B) inflation and time.
C) real GDP and price level.
D) capital goods and consumer goods.
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