Quiz 4 This quiz will count for 1 % point

1
Quiz 4This quiz will count for 1 point

• 10 questions
• Each question is worth 1 quiz point
• Total 10 quiz points

2
Question 1

• A rise in the real interest rate
• A) shifts the investment demand curve rightward.
• B) shifts the investment demand curve leftward.
• C) creates a movement upward along the investment
  demand curve.
• D) creates a movement downward along the
  investment demand curve.

3
Question 2

• The increase in the capital stock equals the
  amount of
• A) gross investment.
• B) depreciation.
• C) net investment.
• D) private sector spending.

4
Question 3

• The labor demand curve slopes downward because
• A) the firm maximizes profits by hiring more
  labor when the real wage rate rises.
• B) workers supply more hours of work when the
  real wage rate rises.
• C) the firm maximizes profits by hiring more
  labor when the real wage rate falls.
• D) workers supply fewer hours of work when the
  real wage rate rises.

5
Question 4

• Suppose there is a rise in the price level, but
  no change in the money wage rate. As a result,
  the quantity of labor demanded
• A) increases.
• B) decreases.
• C) does not change because there is no change in
  the real wage rate.
• D) decreases only if the money wage rate also
  decreases.

6
Question 5

• An increase in labor hours will lead to
• A) a shift of the production function but no
  movement along it.
• B) a movement along the production function but
  no shift in it.
• C) both a movement along and a shift in the
  production function.
• D) neither a movement along nor a shift in the
  production function.

7
Question 6

• In a short-run macroeconomic equilibrium,
  potential GDP exceeds real GDP, so the
• A) short-run aggregate supply curve will shift
  rightward as the money wage rate falls.
• B) short-run aggregate supply curve will shift
  leftward as the money wage rate rises.
• C) long-run aggregate supply curve will shift
  leftward as the money wage rate rises.
• D) long-run aggregate supply curve will shift
  leftward as the money wage rate falls.

8
Question 7

• In a short-run macroeconomic equilibrium, real
  GDP exceeds potential GDP, so the
• A) short-run aggregate supply curve will shift
  rightward as the money wage rate falls.
• B) short-run aggregate supply curve will shift
  leftward as the money wage rate rises.
• C) long-run aggregate supply curve will shift
  leftward as the money wage rate rises.
• D) long-run aggregate supply curve will shift
  leftward as the money wage rate falls.

9
Question 8

• Full-employment equilibrium occurs when
• A) real GDP exceeds potential GDP.
• B) real GDP equals potential GDP.
• C) potential GDP exceeds real GDP.
• D) a result of an increase in long-run aggregate
  supply.

10
Question 9

• In short-run macroeconomic equilibrium
• A) real GDP equals potential GDP and aggregate
  demand determines the price level.
• B) the price level is fixed and short-run
  aggregate supply determines real GDP.
• C) real GDP and the price level are determined by
  short-run aggregate supply and aggregate demand.
• D) real GDP is less than potential GDP.

11
Question 10

• The natural rate of unemployment is
• A) not a fixed percentage of the labor force.
• B) occurs when only there is no cyclical
  unemployment present.
• C) the unemployment rate when the economy is at
  potential GDP.
• D) All of the above answers are correct.

12
Answers

• 1. D
• 2. C
• 3. C
• 4. A
• 5. B
• 6. A

13
Answers

• 7. B
• 8. B
• 9. C
• 10. D