Enter your answer to each of the questions in the blank to the left of the question. Be sure to use lowercase letters only!
|
1. The lesson of Keynesian economics is that:
a. changes in aggregate demand can affect output, employment, and prices in the short-run.
b. changes in aggregate demand will have no affect on output, employment and prices in the short-run, but will in the long-run.
c. changes in aggregate supply are the driving force in determining recessions and periods of economic boom.
d. none of the above.
| |
|
2. Fluctuations in total national output, income, and employment, usually lasting 2-10 years, marked by periods of expansion or contraction in most sectors of the economy are called:
a. recessions.
b. depressions.
c. booms.
d. business cycles.
|
|
3. A _______ is a recurring period of decline in total output, income, and employment, usually lasting from 6 months to a year and marked by widespread contractions in many sectors of the economy.
a. recession
b. depression
c. boom
d. business cycle
|
|
4. A _______ is a large, long recession.
a. recession
b. depression
c. boom
d. business cycle
|
|
5. Which of the following does not occur during an expansion?
a. Consumer purchases increase.
b. Demand for labor rises.
c. Business profits increase.
d. None of the above.
|
|
6. Shifts in aggregate demand will:
a. occur because consumers, businesses, or governments change total spending relative to the economy's productive capacity.
b. necessarily increase GDP.
c. both a and b.
d. neither a nor b.
|
|
7. Which of the following attributes business fluctuations to the expansion and contraction of money and credit?
a. monetary theories
b. the multiplier-accelerator model
c. equilibrium-business cycle theories
d. real-business cycle theory
|
|
8. Which of the following claims that misperceptions about price and wage movements lead individuals to supply too much or too little labor, which leads to fluctuations of output and employment?
a. monetary theories
b. the multiplier-accelerator model
c. equilibrium-business cycle theories
d. real-business cycle theory
|
|
9. Which of the following holds that innovations or productivity shocks in one sector can spread to the rest of the economy and cause recessions and booms?
a. monetary theories
b. the multiplier-accelerator model
c. equilibrium-business cycle theories
d. real-business cycle theory
|
|
10. Which of the following proposes that exogenous shocks are propagated by the multiplier mechanism?
a. monetary theories
b. the multiplier-accelerator model
c. equilibrium-business cycle theories
d. real-business cycle theory
|
|
11. A(n) _______ is a set of equations, presenting the behavior of the economy, that has been estimated using historical data.
a. historical model
b. graph
c. econometric model
d. economic model
|
|
12. What do economists call the total amount of output that is willingly bought at a given level of prices?
a. an econometric model
b. aggregate supply
c. aggregate demand
d. GDP
|
|
13. Why does the AD curve slope downward?
a. The money-supply effect causes the AD curve to slope downward.
b. Higher prices operating on a fixed nominal money supply produce tight money and lower aggregate spending.
c. both a and b.
d. neither a nor b.
|
|
14. An increase in taxes is a(n):
a. expansionary fiscal policy.
b. expansionary monetary policy.
c. contractionary fiscal policy.
d. contractionary monetary policy.
|
|
15. An increase in the money supply is a(n):
a. expansionary fiscal policy.
b. expansionary monetary policy.
c. contractionary fiscal policy.
d. contractionary monetary policy.
|
