1. 1

2. 29
Aggregate Supply and Aggregate Demand
CLICKER QUESTIONS 2

3. Checkpoint 29.1 Checkpoint 29.2 Checkpoint 29.3 Question 1 Question 4

4. Question 1 CHECKPOINT 29.1 When the price level falls, ____________.
aggregate supply increases, but potential GDP does not change
the quantity of real GDP supplied increases
aggregate supply decreases, but potential GDP does not change
the quantity of real GDP supplied decreases
potential GDP and aggregate supply decrease
Answer: D

5. Question 2 CHECKPOINT 29.1 When potential GDP increases, _______.
the AS curve shifts rightward
there is a movement up along the AS curve
the AS curve shifts leftward
there is a movement down along the AS curve
there is neither a movement along nor a shift in the AS curve
Answer: A

6. Question 3 CHECKPOINT 29.1 If the money wage rate rises, _______.
the AS curve shifts rightward
the quantity of real GDP supplied increases
the AS curve shifts leftward
the quantity of real GDP supplied decreases
neither the quantity of real GDP supplied nor aggregate supply change
Answer: C

7. CHECKPOINT 29.2
Question 4
The change in aggregate demand illustrated in the figure could have arisen because ____.
the quantity of money increased
foreign incomes decreased
the government raised taxes
the price level fell
firms expected profit to fall in the future
Answer: A

8. CHECKPOINT 29.2
Question 5
A change in any of the following factors except ____ changes aggregate demand.
expectations about the future
the money wage rate
monetary and fiscal policy
foreign income
the foreign exchange rate
Answer: B

9. CHECKPOINT 29.2
Question 6
When investment increases, the ____ in aggregate demand is ____ the change in investment.
increase; greater than
increase; smaller than
increase; the same as
decrease; the same as
decrease; greater than
Answer: C

10. CHECKPOINT 29.3
Question 7
If the quantity of real GDP supplied equals the quantity of real GDP demanded, then __________.
nominal GDP must equal real GDP
real GDP must equal potential GDP
real GDP must be greater than potential GDP
real GDP might be greater than, equal to, or less than potential GDP
real GDP must be less than potential GDP
Answer: D

11. CHECKPOINT 29.3
Question 8
If the economy is at full employment when investment increases, aggregate demand ____ and the economy is ________ of the business cycle.
decreases; in the expansion phase
increases; in the recession phase
decreases; in the recession phase
increases; moving toward the peak
decreases; moving toward the trough
Answer: D

12. CHECKPOINT 29.3
Question 9
The economy is at full employment. If aggregate demand increases, ______ gap arises. To adjust toward full employment, _____.
an inflationary; the AS curve shifts leftward as the money wage rate rises
an inflationary; the AD curve shifts leftward as prices rise
an inflationary; potential GDP increases to close the gap
a recessionary; the AS curve shifts leftward as the money wage rate falls
a recessionary; the AS curve shifts leftward as the money wage rate rises
Answer: A

13. CHECKPOINT 29.3
Question 10
If the price of oil rises, the _______, the price level ______, and real GDP _______.
AD curve shifts rightward; rises; increases
AS curve shifts leftward; rises; decreases
AD curve and the AS curve shift leftward; rises; decreases
AD curve and the AS curve shift rightward; rises; decreases
AS curve shifts leftward; rises; increases
Answer: B