Name: __________________________________ Unit 3 Week 2.1 Problem Set

2008 Audit Exam

2008 Audit Exam

2008 Audit Exam

2008 Audit Exam

2008 Audit Exam 2012 Exam

2012 Audit Exam

2012 FRQ #3

1. Which of the following best describes the relationship illustrated by the short-run aggregate supply (SRAS) curve? 

A The negative relationship between the price level and the quantity of output produced B The positive relationship between the unemployment rate and the amount of output supplied C The positive relationship between the price of a single good and the quantity supplied by producers D The positive relationship between the price level and the quantity of output produced E The fixed amount of all output that will be produced, which does not respond to the price level 2. Which of the following best describes something that would cause an increase in output along a short-run aggregate supply (SRAS) curve? A An increase in the consumer price index (CPI) B A decrease in the wage rate C An increase in business taxes D Firms spend less on capital equipment E An increase in the price of a single good 3. What happens to inflation and unemployment as you move to the left along the short-run aggregate supply (SRAS) curve? A. Inflation increases and unemployment decreases. B Inflation decreases and unemployment increases. C Inflation decreases and unemployment doesn’t change. D Inflation doesn’t change and unemployment doesn’t change. E Inflation increases and unemployment doesn’t change.

4. What happens to inflation and unemployment if a country moves from point A to point B on the short-run aggregate supply (SRAS) curve shown above?

A. The rate of inflation increases and unemployment decreases. B. The rate of inflation decreases, and the unemployment rate doesn’t change. C. The rate of inflation doesn’t change, and the unemployment rate doesn’t change. D. The rate of inflation increases and the unemployment rate doesn’t change. E. The rate of inflation decreases and unemployment increases.