Macro Summer 1-Test 3 – Flashcards

For an economy, aggregate demand equals:

When the price level falls, the total quantity of goods and services demanded:

Which of the following will increase aggregate demand in the United States?

The aggregate supply curve indicates the:

The aggregate demand curve shows how real GDP purchased varies with changes in:

The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption is known as the:

Which of the following would cause a rightward shift in the aggregate supply curve?

Which of the following characterizes the classical view of the economy?

The horizontal (flat) segment of the aggregate supply curve:

In the aggregate demand and supply model, the:

If aggregate demand increases in the intermediate range of the aggregate supply curve then the:

Given aggregate demand, a decrease in aggregate supply creates:

The effect of an increase in aggregate supply is a(n):

Which of the following reasons helps explain why the aggregate demand curve is downward sloping?

When OPEC caused the price of oil to rise in the early 1970s, the:

Demand-pull inflation is associated with a(n):

An expansionary fiscal policy may include:

When an economy is operating below its potential capacity, Keynesian economists argue that:

The fraction of each added dollar of income that is used for consumption is called the:

To combat a recession, Keynesian fiscal policy recommends:

As the marginal propensity to consume (MPC) increases, the spending multiplier:

If the MPC is 0.80, and if the goal is to increase real GDP by $200 million (at a constant price level, i.e. shift AD to the right by $200 million)), then by how much would government spending have to change to generate this increase in real GDP?

If the marginal propensity to save (MPS) is 0.50, the value of the spending multiplier is:

If the marginal propensity to consume = 0.75, then:

If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP by $300 million (shift AD to the right by $300 million), then by how much would they have to change taxes?

When an economy dips into recession, automatic stabilizers will:

Which of the following is an example of an automatic stabilizer?

Supply-siders' policy recommendations include:

When the federal government is running a budget deficit:

When the U. S. federal government runs a budget deficit, it borrows money by selling:

The sum of past federal budget deficits is the:

A limit on the quantity of a good that may be imported in a given time period is called:

When the value of the goods and services we export is less than the value of the goods and services we import,

An exchange rate is the number of units of:

Which of the following provides the foundation of the case for free trade?

If real interest rates in the United States are higher than those of our trading partners, and investment opportunities look safer and more rewarding, what will tend to happen to the foreign exchange value of the dollar and the U.S. current account (balance of trade) deficit or surplus?

The theory of comparative advantage suggests that nations should produce a good if they:

A tax on an imported good is called:

The theory presented in Chapter 18 suggests that International trade has the potential to ____ the availability of goods and services to ____.

A tariff has the effect of:

Tariff rates on products imported into the United States:

An appreciation of one's currency means that:

The primary purpose of WTO is to:

The WTO was: