Question: If a major hurricane devastated industry in the eastern United States, the result would most likely cause A. a decrease in aggregate demand. B. a

If a major hurricane devastated industry in the eastern United States, the result would most likely cause

A. a decrease in aggregate demand.

B. a decrease in aggregate supply.

C. an increase in aggregate demand.

D. an increase in aggregate supply.

E. an increase in employment.

A leftward shift of short-run aggregate supply will result in

A. lower unemployment.

B. a smaller recession.

C. lower inflation.

D. stagflation.

E. higher inflation.

Assume disposable income for an economy is $10,000, consumption is $7,500, and the marginal propensity to save (MPS) is .25. If disposable income increases by $1,000, what is the amount of consumption in this economy?

A. $7,500

B. $10,000

C. $8,250

D. $11,000

E. $8,500

If, while maintaining a balanced budget, Congress decreases spending and taxes by $100 each, then

A. aggregate supply will shift right.

B. aggregate supply will shift left

C. aggregate demand will remain the same.

D. aggregate demand will shift right.

E. aggregate demand will shift left.

The best way to increase investment while holding real output level would be to

A. decrease government spending and decrease the money supply.

B. increase government spending and decrease the money supply.

C. decrease government spending and increase the money supply.

D. increase government spending and decrease taxes.

E. increase government spending and increase the money supply.

Which of the following will cause the production possibilities frontier to shift outward?

A. An increase in government spending.

B. An increase in transfer payments.

C. A decrease in long-run aggregate supply.

D. An increase in worker productivity.

E. An increase in aggregate demand.

If the Federal Reserve decreases the money supply, how will interest rates, the international value of the dollar, and exports be impacted as a result?

Interest Rates / Value of Dollar / Exports

A. Increase / Increase / Increase

B. Decrease / Decrease / Increase

C. Increase / Decrease / Increase

D. Decrease / Increase / Decrease

E. Increase / Increase / Decrease

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