question

equilibrium

answer

the combination of price level and real output that is compatible with both aggregate demand and aggregate supply is the definition of?

question

consumption, government spending, net exports, and investment

answer

the components of aggregate demand are?

question

disposable income

answer

which of the following forces dd keynes assert had the strongest influenced on consumption decisions?

question

the APS is negative, the APC is greater than 1, households are dissaving

answer

when consumer spending exceeds disposable income all of the following are true

question

the change in total consumption by the change in disposable income

answer

the marginal propensity to consume can be found by dividing

question

1

answer

the MPC+MPS must always equal

question

wealth, tax policy, consumer confidence

answer

three determinants of autonomous consumption are

question

when autonomous consumption equals zero

answer

under what conditions would the APC equal to the MPC at all levels of disposable income?

question

consumption increases as disposable income increases

answer

the consumption function implies that

question

the MPC changes

answer

the line described by the consumption function C=a+bYd will change its slope when

question

dissaving to the left of the intersection point

answer

using the income level at which the consumption function intersects the 45-degree line, we can identify

question

the AD curve will shift to the right

answer

if wealth rises

question

the AD curve will shift to the right

answer

if the availability of credit increases, then

question

equipment, inventory, plant or office buildings

answer

investment spending includes expenditures on all of the following

question

a change in the rate of interest

answer

which of the following causes a movement along the investment demand curve?

question

an improvement in technology

answer

which of the following will cause the aggregate-demand curve to shift to the right?

question

a decrease in consumer and business confidence because of a terrorist attack

answer

which of the following will cause the aggregate-demand curve to shift to the left

question

80

answer

consumption and investment spending account for approximately ___________ percent of total output

question

federal only

answer

which government sector has the ability to respond counter-cyclically to the economy

question

spending behavior of foreign consumers and businesses

answer

gross exports for the united states depend most directly on the

question

a decrease in U.S. imports

answer

what will NOT cause an increase in U.S. gross exports

question

an increase in U.S. consumer confidence

answer

which of the following will cause an increase in U.S. imports?

question

productivity

answer

what is NOT a component of aggregate demand?

question

neither full employment nor price stability

answer

keynes was concerned that at macroeconomic equilibrium the economy would experience

question

is the amount by which the rate of actual spending falls short of full employment GDP

answer

a recessionary gap

question

there is a recessionary gap

answer

which of the following is true when an economy produces at full employment, but consumers, government, businesses, and the foreign sector do not buy all the output?

question

inflationary gap

answer

which of the following occurs when the spending on final goods and services exceeds full employment GDP?

question

excessive aggregate demand in relation to an economy's production capacity

answer

demand-pull inflation is caused by?

question

great, too small or unstable

answer

the economy will NOT reach and maintain its goals of full employment and price stability if aggregate demand is too...

question

the slope of the aggregate expenditures curve

answer

because government expenditures, investment, and net exports are not affected by income, the slope of the consumption function equals

question

an aggregate expenditures curve shifting upward

answer

a sudden increase in confidence by the business community could best be represented by

question

equilibrium (macro) at the intersection point

answer

using the output at which the aggregate expenditures curve intersects the 45-degree line we can identify

question

wealth, credit, expectation

answer

autonomous consumption depends on all of the following

question

total consumption divided by total disposable income

answer

APC is equal to

question

MPC

answer

the change in total spending from additional income is?

question

macroeconomics

answer

the study of aggregate economic activity for the economy as a whole is?

question

flexible wages and prices allow a laissez faire economy to adjust to shifts in aggregate demand

answer

according to classical theory?

question

unemployment might occur temporarily

answer

based on the classical view?

question

are typically self-adjusted

answer

according to classical economists, market-driven economies

question

john maynard keynes

answer

who believed that small disturbances in output, prices, or unemployment were likely to be magnified by the invisible hand of the marketplace?

question

practice a laissez faire policy approach

answer

according to keynes, when the economy falters the government should do any of the following except?

question

decrease government purchase

answer

according to keynes, which of the following can be used to slowdown an overheated economy?

question

lower real output

answer

which of the following is a characteristic of a downturn in the business cycle?

question

the price level

answer

the GDP is better than nominal GDP for measuring growth because real GDP has been adjusted for changes in?

question

lead to a high inflation rate

answer

the great depression did NOT?

question

a recession

answer

a decline in total output for two or more consecutive quarters is refereed to as?

question

growth recession

answer

in which of the following situations is the percentage change in real GDP always positive?

question

cutbacks in defense production

answer

which of the following caused a recession in the years following world war II?

question

external shocks such as weather

answer

which of the following is NOT considered a macro outcome

question

growth rate of the population

answer

all of the following can be used to measure macroeconomic performance EXCEPT for the?

question

population growth, spending availability of money

answer

internal market forces include

question

aggregate supply and demand

answer

determinants of macro performance work on macro outcomes through?

question

people buy more goods and services at lower average prices

answer

the aggregate demand curve is downward sloping because, other thing being equal?

question

interest rate effect will lead to a higher quantity of output demanded

answer

CETERIS PARIBUS, if averahe prices in the U.S. economy fall, then the?

question

the interest rate effect

answer

which of the following is NOT associated with the aggregate supply curve?

question

constant costs which do not rise when prices rise

answer

as output rises, the profit effect results from?

question

higher average prices are reflected in higher costs

answer

the cost effect implies that?

question

macro equilibrium

answer

the unique situation in which the behavior of buyers and sellers is compatible is referred to as?

question

decrease, but the price level may increase, decrease, or stay the same

answer

if aggregate demand decrease and aggregate supply decreases, the level of real output will?

question

consumers would bid prices up by competing for goods currently in shortage

answer

which of the following would result if the price level were below the equilibrium level?

question

demand curve shifts to the left

answer

CETERIS PARIBUS, the price level will decrease if the aggregate:

question

demand shifts to the right and supply shifts to the right

answer

which combination of shifts of aggregate demand and supply would definitely cause an increase in real GDP?

question

the economy is working beyond normal capacity

answer

which of the following is true if equilibrium exceeds full employment?

question

supply-side

answer

which of the following economic perspectives focuses on the need for government to shift aggregate supply to correct problems of unemployment and inflation?

question

insufficient spending on the part of consumers, business, and government

answer

according to keynes, unemployment resulted from?

question

either fiscal or supply-side policy

answer

a tax can best be characterized as?

question

supply side economists

answer

inidividual employment and training programs are levers most likely to advocated by?

question

classical theory

answer

the emphasis by some economists on long-term outcomes is reminiscent of?

question

implies that aggregate demand shifts have no impact on output

answer

a vertical aggregate supply curve

question

increase the average price level but have no impact on unemployment

answer

when the AS curve is vertical, increase in AD will?

question

cost effects are larger than profit effects

answer

in the long run, which of the following is true?

question

supply side policy

answer

the only policy lever that is effective against unemployment when the AS curve is vertical is?

question

non interference by the government

answer

a laissez faire policy approach during a recession would advocate?

question

trade barriers are reduced

answer

international trade and money flows can increase aggregate supply and aggregate demand if?

question

by changes in a price index such as the consumer price index (CPI)

answer

how is inflation measured?

question

some people actually gain from inflation, whereas others suffer a loss of real income or wealth; creates uncertainty and speculation

answer

Why is inflation a socioeconomic problem?

question

an inflation rate of less than 3 percent per year

answer

what is the US' goal?

question

either excessive demand (demand-pull inflation) or by structural changes in supply (cost-push inflation)

answer

What are the broad causes of inflation?

question

in the united states

answer

inflation rates above 10% rarely occur where?

question

deflation

answer

a decrease in the average level of prices of goods and services is:

question

average prices rise by zero percent

answer

when there is no deflation or inflation?

question

stable prices, inflation or deflation

answer

changes in relative prices may occur in a period of?

question

signialing changes in the desired mix of output

answer

which of the following functions are performed by changes in relative prices but NOT by changes in average prices?

question

decreases

answer

if the price of bluetooth headsets rises 12% during a year when the level of average prices rises 13%, the relative prices of bluetooth headsets:

question

determining the redistribution of income as a result of inflation

answer

comparing relative prices is more useful than examining average prices in:

question

redistribution of income and wealth between different groups

answer

which of the following results from unexpected increases in the rate of inflation?

question

a price, income, and wealth effect

answer

all of the following are microeconomic consequence of inflation

question

nominal income

answer

the amount of money income received in a given time period, measured in current dollars is?

question

nominal income adjusted for inflation

answer

real income is?

question

the purchasing power of the money you receive

answer

your real income is?

question

real incomes of the users of that product fall

answer

when the price of a product rises faster than the inflation rate?

question

increased but your real income has decreased

answer

if the price of your cell phone services increases from $70 to $105 over a period of one year and your income rises from $1500 to $1525 then it is true that your nominal income has?

question

income effects

answer

if a bank has already lent money at a fixed interest rates, then during a period of inflation it experiences?

question

borrowers who have loans at fixed interest rates

answer

which of the following groups is protected from a sudden increase in inflation?

question

people who own assets that are appreciating faster than the inflation rate

answer

generally speaking, which of the following groups would tend to gain real income from the wealth effects of inflation?

question

use of nominal dollars rather than real dollars to gauge income or wealth

answer

money illusion is the...

question

money illusion

answer

when people make their decisions on the basis of the face value of currency rather than the real value, their decision reflect?

question

a sudden burst of inflation, a sudden burst of deflation, withholding of resources from the production process because of speculation

answer

all of the following push the country inside its PPC

question

causes businesses to be more cautious since the future is uncertain

answer

inflation effects production decisions because it:

question

an inflation rate in excess of 200% lasting at least one year

answer

hyperinflation is:

question

more resources going into the production process

answer

speculation during periods of inflation can result in all of the following EXCEPT

question

bracket creep

answer

last year you earned $20,000 and paid taxes in the second tax bracket at 15%. this year you earned $25,000, the extra $5,000 just compensating you for inflation. however, this year you paid taxes in the third bracket at 20%. this illustrates the concept of?

question

lenders are better of, businesses are reluctant to borrow money, purchasing power increases

answer

if the price level is falling, who is effected

question

a measure of changes in the average price of consumers goods and services

answer

the consumer price index is:

question

find out what people buy with their incomes and how the prices of what they buy changes

answer

to construct the consumer price index, the bureau of labor statistics must?

question

annual percentages rate increase in the average price level

answer

the inflation rate is the?

question

increased by approximately 9%

answer

assume the CPI increases fro 110 to 121 and Manny's nominal income increases from $100,000 to $120,000 over the same period. Manny's real income has?

question

worse off since his nominal wage fell faster then the price level did

answer

if a price index changed from 150 in 2008 to 148.5 in 2009, while jim bob's nominal wage fell from $25 to $24, then jim bob is:

question

time period used for comparative analysis

answer

the base period is the

question

percentage of the typical consumer budget spent on the item

answer

item weight is the

question

producers

answer

the PPI is the best index to measure average price changes faced by:

question

the PPI

answer

which of the following is often watched closely as a clue to potential changes in consumer prices in the future?

question

GDP deflator

answer

the price index that refers to all goods and services produced is the:

question

the GDP deflator

answer

which of the following changes in expenditures patterns as well as price changes?

question

stable prices

answer

if some specific prices fall, some relative prices rise, and the average price remains unchanged, then there has been a period of?

question

overstate the inflation rate

answer

if the CPI doesn't measure product quality improvements , then the CPI tends to?

question

inflation was at its worst during the great depression

answer

all of the following statements about inflation in the U.S. are correct except?

question

demand-pull inflation

answer

if the economy is producing at capacity and consumers are willing and able to buy more, the may cause?

question

cost-push inflation

answer

when production costs increase and producers raise output prices, the result is?

question

an automatic adjustment of nominal income to the rate of inflation

answer

A COLA is?

question

an ARM

answer

a mortgage that adjusts the nominal interest rate to changing rates of inflation is:

question

the nominal interest rate minus the anticipated rate of inflation

answer

the Real interest rate it?

question

information about the relative scarcities of resources and goods and services

answer

the most fundamental function of prices in market economy is to provide

question

nominal income

answer

the amount of money income received in a given time period, measured in current dollars is?

question

CPI

answer

which of the following indexes tracks changes in the average prices paid by consumers?

question

seasonal, frictional, structural, cyclical

answer

What are the four categories of unemployment?

question

not part of the labor force and is not counted in the unemployment rate

answer

jack graduated from college last month, but he has not yet started looking for a job. Jack is:

question

economic growth

answer

an increase in real GDP is known as?

question

nations production possibilites curve will shift outward

answer

if a nation experiences a year of unusually high immigration which increases the size of the labor force, then we can conclude that the?

question

fewer social constraints on who can work

answer

which of the following would shift the institutional PPC outward, but would leave the physical PPC unchanged?

question

institutional PPC shifts outward

answer

when society reduces social constraints in time of war, the:

question

inside the institutional PPC

answer

when the economy is below full employment, it is producing

question

10 percent

answer

according to Okun's law, if unemployment rises by 5% while imports and exports increase at roughly the same rate, the economy will lose output equal to?

question

production moves inside the institutional PPC

answer

as unemployment increases and an economy moves away from full employment?

question

employed

answer

those that work part-time and do NOT desire full-time employment are referred to as?

question

unemployment rate

answer

the proportion of the labor force that is unemployed is the?

question

inverse relationship

answer

what type of relationship is there between education level and the unemployment rate?

question

college graduates

answer

which of the following group generally has the lowest unemployment rate?

question

duration of unemployment falls, costs associated with unemployment fall, unemployment rates fall

answer

when the economy is growing what happens to unemployment?

question

job losers

answer

which reason for unemployment increases the most during a recession?

question

a retired professional football player who tried to make a comeback but found no one willing to give him a tryout, so he no longer looks for a job

answer

which of the following is considered a discouraged worker?

question

decrease

answer

suppose there are 6 million unemployed workers actively seeking a job. after a period of time 1,500,000 of these workers become discouraged and no longer look for employment. if everything else remains constant the unemployment rate will?

question

underemployed but do not contribute to the unemployment statistic

answer

part time workers who desire full time employment are?

question

remain unchanged until the unemployed find a job

answer

suppose there are 4 million people in an economy that are classified as unemployed. after more thorough investigation it becomes obvious that 200,000 of these people are actually phantom unemployed. as a result of this, the unemployment rate will?

question

not part of the labor force because they do not desire to work

answer

the phantom unemployed are?

question

crime rates, divorce rates, child abuse

answer

when the U.S. unemployment rate decreased in the late 1990s, so did all of the following?

question

seasonal unemployment

answer

when migrant workers seek employment after the crops have been picked, the unemployment rate goes up. this situation is an example of:

question

seasonal unemployment

answer

the type of unemployment that increases most when teenagers look for temporary jobs is:

question

frictionally unemployed

answer

nancy returns to school to study medicine. after graduating, she spends six months looking for a job. she is considered?

question

frictional unemployment

answer

after being fired from a job, some people find that it take several months to find a new job. this is an example of which of the following types of unemployment?

question

structural unemployment

answer

when there is a mismatch between the skills required for a job and the skills of job seekers, the unemployment that results is an example of?

question

there are enough chairs, but some are not the right size

answer

in terms of musical chairs analogy in the text, which is a description of structural unemployment?

question

structural unemployment

answer

long-term changes in demand which make some goods obsolete are likely to have their greatest impact on?

question

there are too few chairs

answer

in terms of the musical chairs analogy in the text, which of the following is a description of cyclical unemployment?

question

cyclical unemployment

answer

during an economic downturn, consumers spend considerably less on goods and services. the results in layoffs, and the laid off workers are classified as?

question

those which stimulate economic growth

answer

which of the following government policies or programs would be most appropriate to offset cyclical unemployment?

question

the economy has reached the lowest level of unemployment compatible with price stability

answer

full employment in the U.S. economy means that?

question

lowering cyclical and structural unemployment

answer

the employment act of 1946 set which of the following goals for the economy?

question

1960s

answer

during which of the following decades was the goal of 4% unemployment set as an acceptable compromise between our full employment and inflation goals?

question

4 percent unemployment rate

answer

which of the following was a stated goal of the humphrey-hawkins act?

question

world war 2

answer

unemployment was fairly low during?

question

4%

answer

in the 1960s, the council of economic advisors determined the acceptable level of unemployment that would be used in determining full employment was:

question

economic policy makers in formulating policies and evaluating performance

answer

national-income accounts assist in

question

C+I+G+(X-M)

answer

a nations GDP is?

question

the total value added at all stages of production

answer

a nations GDP can be calculated as?

question

goods produced by the U.S. firms located in forgiven countries

answer

which of the following is treated differently in computations of GNP as compared with GDP?

question

chipsets produced by U.S. owned firms operating in china

answer

which of the following would be included in u.s. GNP but NOT in U.S. GDP?

question

make international comparisons of the standard of living

answer

the GDP per capita is the most practical way to?

question

the value of lawn mowing provided by a teenager for his own family

answer

which of the following is EXCLUDED from calculations of GDP?

question

right. GDP will increase CETERIS PARIBUS

answer

suppose a friend claims he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP. your friend is?

question

the money you pay a private tutor who works for tutor Inc.

answer

all of the following are counted as unreported income EXCEPT?

question

productive but excluded from GDP because it is a non market activity

answer

when an individual makes repairs to her own home instead of hiring a company to make the repairs, the activity is?

question

paper purchased by a textbook company

answer

which of the following is NOT a final good or service?

question

included in the value of final goods in GDP

answer

the total value of intermediate goods is?

question

increase in market value of product that takes place at each stage of the production process

answer

value added is the?

question

value of final output produced in a given period measured in constant prices

answer

real GDP is the

question

analyze the growth rate of the economy over time

answer

real GDP is used most effectively to?

question

nominal GDP decreased

answer

if real GDP falls from on period to another and the price level stays the same, we can conclude that?

question

adjusted for changes in relative prices

answer

the purpose of chain weighted price adjustments in the calculation of GDP is to:

question

how much the economy can produced

answer

an economy's PPC indicates?

question

the consumption of capital in the production process

answer

depreciation represents

question

the market value of goods and services produced in the economy after adjusting for depreciation

answer

net domestic product is?

question

net domestic product

answer

the national-income aggregate calculated by subtracting depreciation from GDP is known as?

question

gross investment is greater than depreciation

answer

an economy's production possibilities are most likely to expand if?

question

gross investment minus depreciation is positive

answer

the stock of capital in the united states can grow only if?

question

the nations capital stock is being depleted

answer

if depreciation exceeds gross investment

question

the population increases faster than the capital stock

answer

a nations capital stock will decline, CETERIS PARIBUS, for all the following reasons expect?

question

households

answer

which of the following typically purchases the most goods and services in the U.S. economy?

question

medical services

answer

which of the following expenditures are included in consumption?

question

an increase in business inventories

answer

which of the following is investment, according to an economist?

question

federal, state and local government spending on goods and services only

answer

which of the following types of government spending is included in the calculation of GDP?

question

goods sold to foreigners

answer

exports are?

question

GDP will decrease

answer

CETERIS PARIBUS, if imports increase in any given year?

question

the value of exports minus the value of imports

answer

net exports are?

question

interest

answer

which of the following is used to measure GDP according to the income approach?

question

personal income

answer

income received by households before payments of personal taxes is known as

question

personal income and disposable income

answer

social security payments to retired persons are included in?

question

the amount households have to spend or to save

answer

disposable income is?

question

consumption+saving

answer

disposable income is equal to?

question

saving

answer

the part of disposable income not spent on current consumption is?

question

business investment

answer

businesses return purchasing power to the circular flow in the form of?

question

value added

answer

the increase in the market value of a good at a particular stage of production is known as?

question

investment goods

answer

goods produced for the purpose of producing other goods are known as

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