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Chapter 9

224. Within the aggregate demand/aggregate supply framework, the quantity on the horizontal axis in the aggregate goods and services market represents the
|a. |total amount of government spending. |
|b. |total real output (real GDP) of the economy. |
|c. |total unemployment of the economy. |
|d. |price level of the economy. |

ANS: B

225. In the loanable funds market, the true burden of borrowers and the true yield to lenders is the
|a. |real (inflation adjusted) interest rate. |
|b. |nominal (money) interest rate. |
|c. |inflation rate. |
|d. |inflation premium rate (in money terms). |

ANS: A

226. When AD is equal to SRAS at an output level equal to the LRAS curve,
|a. |we are at long-run macroeconomic equilibrium. |
|b. |we are at the natural rate of unemployment. |
|c. |both a and b are true. |
|d. |neither a nor b is true.

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