An anticipated change is an economic occurrence that a. catches most people by surprise. b. is foreseen by most economic participants. c. is anticipated by economists but unforeseen by other people....

Answers are in bold
1. An anticipated change is an economic occu
ence that
a. catches most people by surprise.
b. is foreseen by most economic participants.
c. is anticipated by economists but unforeseen by other people.
d. is foreseen by policy makers but unforeseen by the public.

2. An unanticipated economic event is a change that
a. catches most people by surprise.
b. was foreseen by most economic participants.
c. is the result of a steady long-term trend in an economic variable.
d. was forecast by most economists.

3. Which of the following will most likely be an unanticipated economic change?
a. higher oil prices resulting from a revolution in an oil-exporting country such as Libya
b. this year’s increase in the labor force
c. a constant increase in the general level of prices over a lengthy period of time
d. an increase in prime-age workers as a proportion of the labor force

4. A cu
ency appreciation will be most likely to
a. reduce net exports and therefore increase aggregate demand.
b. raise net exports and therefore decrease aggregate demand.
c. reduce net exports and therefore decrease aggregate demand.
d. raise net exports and therefore increase aggregate demand.
5. Which of the following factors would increase aggregate demand in the goods and services market?
a. an decrease in stock prices
b. an increase in the real interest rate
c. a decrease in real incomes a
oad
d. increased optimism on the part of consumers and businesses

6. Which of the following is the best example of a supply shock?
a. an increase in the availability of capital and machinery due to normal changes in business
investment
b. a decrease in the productivity of the labor force due to a decline in the average educational
level of workers
c. a decline in agricultural output due to a summer drought
d. an increase in output as a result of an expansion in employment

7. When the economy is operating at an output beyond its full-employment potential, the
a. actual level of unemployment will exceed the natural rate of unemployment.
b. actual level of unemployment will equal the natural rate of unemployment.
c. strong demand for resources will place upward pressure on resource prices.
d. aggregate demand will increase until full employment is restored.

8. When the economy is operating at an output rate less than full-employment capacity,
a. a strong demand for resources will cause resource prices to rise.
b. actual unemployment will be less than the natural rate of unemployment.
c. the rate of inflation will tend to rise.
d. weak demand for investment will place downward pressure on real interest rates.
9. An increase in the exchange rate value of the U.S. dollar (stronger U.S. dollar), relative to the
Japanese yen, will cause U.S. imports from Japan to
a. increase and exports to Japan to decrease.
b. increase and exports to Japan to increase.
c. decrease and exports to Japan to decrease.
d. decrease and exports to Japan to increase.

10. An improvement in technology would shift which of the following curve(s)?
a. aggregate demand and short-run aggregate supply
b. only the short-run aggregate supply
c. only the aggregate demand
d. short-run and long-run aggregate supply

thought.
d. the marginal propensity to consume is greater than one.

11. The marginal propensity to consume is defined as the
a. fraction of total income not spent on consumption.
b. proportion of any change in income that is spent on consumption.
c. fraction of total income spent on consumption.
d. fraction of a change in income that is saved.

12. If an...