ECONOMIC CHAPTER 2 EXAM
CORRECT 100%
The aggregate demand curve slopes downward to the right for all of the following
reasons except - ANSWERThe multiplier effect
If aggregate demand increases and short-run aggregate supply is horizontal, the
price level __________, real GDP ______________, and the unemployment rate
____________ - ANSWERStays the same; increases; decreases
The real balances effect refers to the - ANSWERIncrease in the purchasing power of
a given sum of money that occurs when the price level decreases
Ceteris Paribus, short-run aggregate supply decreases in response to - ANSWERAn
increase in the price of a major input such as oil
Adverse supply shocks lead to - ANSWERA higher price level at a lower level of
output (real gdp)
If SRAS is upward sloping, an increase in AD will - ANSWERIncrease both real GDP
and the price level
The long-run aggregate supply curve is - ANSWERVertical at the output level
associated with the natural rate if unemployment (full employment).
If The actual unemployment rate (U) is greater than the natural unemployment rate
(Un) - ANSWERA recessuonary gap exists and there is a surplus of labor
Economists that believe the economy is self regulating advocate - ANSWERA policy
if laissez-faire
Which of the following statements is not consistent with classical reasoning? -
ANSWERMacroeconomics equilibruim is likely to remain at less than full
employment
The notion that whatever is produced will Be consumed so that a general over
production of goods and services is not possible is - ANSWERSay's Law and is
associated with the classical view
In the Keynesian model, the primary determinant of consumption spending is
__________ and the primary determinant if saving is _____________ -
ANSWERDisposable income; disposable income
CORRECT 100%
The aggregate demand curve slopes downward to the right for all of the following
reasons except - ANSWERThe multiplier effect
If aggregate demand increases and short-run aggregate supply is horizontal, the
price level __________, real GDP ______________, and the unemployment rate
____________ - ANSWERStays the same; increases; decreases
The real balances effect refers to the - ANSWERIncrease in the purchasing power of
a given sum of money that occurs when the price level decreases
Ceteris Paribus, short-run aggregate supply decreases in response to - ANSWERAn
increase in the price of a major input such as oil
Adverse supply shocks lead to - ANSWERA higher price level at a lower level of
output (real gdp)
If SRAS is upward sloping, an increase in AD will - ANSWERIncrease both real GDP
and the price level
The long-run aggregate supply curve is - ANSWERVertical at the output level
associated with the natural rate if unemployment (full employment).
If The actual unemployment rate (U) is greater than the natural unemployment rate
(Un) - ANSWERA recessuonary gap exists and there is a surplus of labor
Economists that believe the economy is self regulating advocate - ANSWERA policy
if laissez-faire
Which of the following statements is not consistent with classical reasoning? -
ANSWERMacroeconomics equilibruim is likely to remain at less than full
employment
The notion that whatever is produced will Be consumed so that a general over
production of goods and services is not possible is - ANSWERSay's Law and is
associated with the classical view
In the Keynesian model, the primary determinant of consumption spending is
__________ and the primary determinant if saving is _____________ -
ANSWERDisposable income; disposable income
