Filters
Question type
Study Flashcards

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 28.1.3 -Refer to Figure 28.1.3.Assume that the figure illustrates an economy initially in equilibrium at the intersection of the SAS? curve and the AD? curve.If the aggregate demand curve is correctly expected to shift to AD?,new equilibrium real GDP is ________ and the new equilibrium price level is ________. A) $380 billion;125 B) $500 billion;150 C) $500 billion;100 D) $620 billion;125 E) $500 billion;125 Figure 28.1.3 -Refer to Figure 28.1.3.Assume that the figure illustrates an economy initially in equilibrium at the intersection of the SAS? curve and the AD? curve.If the aggregate demand curve is correctly expected to shift to AD?,new equilibrium real GDP is ________ and the new equilibrium price level is ________.


A) $380 billion;125
B) $500 billion;150
C) $500 billion;100
D) $620 billion;125
E) $500 billion;125

F) B) and D)
G) A) and B)

Correct Answer

verifed

verified

In new classical cycle theory,________ bring fluctuations in real GDP around potential GDP.


A) unexpected changes in aggregate demand
B) expected changes in aggregate demand
C) fluctuations in money growth with rigid wages
D) fluctuations in investment coupled with rigid wages
E) expected changes in labour productivity

F) A) and C)
G) None of the above

Correct Answer

verifed

verified

Use the figure below to answer the following question. Use the figure below to answer the following question. Figure 28.1.5 -The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation. All of the following events except an increase in ________ might cause a demand-pull inflation. A) the money wage rate B) exports C) the quantity of money D) government expenditure E) transfer payments Figure 28.1.5 -The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation. All of the following events except an increase in ________ might cause a demand-pull inflation.


A) the money wage rate
B) exports
C) the quantity of money
D) government expenditure
E) transfer payments

F) C) and E)
G) A) and E)

Correct Answer

verifed

verified

A movement down along the short-run Phillips curve results from an unanticipated


A) decrease in aggregate demand.
B) increase in aggregate demand.
C) decrease in short-run aggregate supply.
D) increase in short-run aggregate supply.
E) increase in the natural unemployment rate.

F) C) and D)
G) D) and E)

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.If SAS shifts from SAS? to SAS?,then A) inflation is expected to be 10 percent. B) inflation will be 10 percent. C) a recession will occur. D) unemployment will fall. E) B and C. Figure 28.1.2 -Refer to Figure 28.1.2.If SAS shifts from SAS? to SAS?,then


A) inflation is expected to be 10 percent.
B) inflation will be 10 percent.
C) a recession will occur.
D) unemployment will fall.
E) B and C.

F) C) and D)
G) A) and B)

Correct Answer

verifed

verified

Along the short-run Phillips curve,everything remaining the same,the higher the


A) unemployment rate, the lower the inflation rate.
B) price level, the lower the inflation rate.
C) money wage rate, the lower is the unemployment rate.
D) quantity of money, the lower the unemployment rate.
E) growth rate of the quantity of money, the higher the inflation rate.

F) B) and D)
G) B) and C)

Correct Answer

verifed

verified

Which business cycle theory emphasizes that,because of previously negotiated wage agreements,both expected and unexpected fluctuations in aggregate demand can change real GDP?


A) the new classical cycle theory
B) the new Keynesian cycle theory
C) Monetarist cycle theory
D) Keynesian cycle theory
E) Real business cycle theory

F) B) and E)
G) A) and E)

Correct Answer

verifed

verified

________ states that the main source of economic fluctuations is fluctuations in business confidence.


A) Real business cycle theory
B) New classical cycle theory
C) Keynesian cycle theory
D) Monetarist cycle theory
E) None of the above

F) D) and E)
G) B) and E)

Correct Answer

verifed

verified

Suppose aggregate demand increases by more than expected.Which of the following describes what occurs?


A) Real GDP is greater than potential GDP.
B) The price level rises.
C) Unemployment falls.
D) The natural unemployment rate does not change.
E) All of the above.

F) A) and D)
G) B) and D)

Correct Answer

verifed

verified

Consider the short-run Phillips curve in Canada since the 1960s. Choose the best statement.


A) Canada's inflation/unemployment tradeoff is best shown as a series of shifting short-run Phillips curves that sometimes shift upward and sometimes shift downward.
B) Canada's inflation/unemployment tradeoff is undefined.
C) Canada's short-run Phillips curve is consistently shifting upward.
D) Canada's short-run Phillips curve is consistently shifting downward.
E) Canada's short-run Phillips curve is consistently shifting rightward.

F) A) and B)
G) None of the above

Correct Answer

verifed

verified

The economy starts out at a full-employment equilibrium.Some events then occur that generate a cost-push inflation. Which of the following events might cause a cost-push inflation?


A) a decrease in exports
B) an increase in the quantity of money
C) a decrease in government expenditure
D) an increase in the money wage rate or an increase in the money prices of raw materials
E) an increase in taxes

F) B) and E)
G) A) and B)

Correct Answer

verifed

verified

Stagflation is the result of


A) a decrease in aggregate demand.
B) a decrease in short-run aggregate supply.
C) an increase in aggregate demand.
D) an increase in short-run aggregate supply.
E) a decrease in short-run aggregate supply combined with a simultaneous increase in aggregate supply.

F) C) and E)
G) D) and E)

Correct Answer

verifed

verified

According to the real business cycle theory,during a recession the demand for labour ________ and the supply of labour ________.


A) increases;decreases
B) decreases;does not change
C) does not change;decreases
D) decreases;decreases
E) decreases;increases

F) A) and E)
G) B) and C)

Correct Answer

verifed

verified

The Canadian long-run Phillips curve ________ when the expected inflation rate rises and ________ when the expected inflation rate falls. The Canadian long-run Phillips curve ________ when the natural unemployment rate increases and ________ when the natural unemployment rate decreases.


A) does not shift;does not shift;does not shift;does not shift
B) does not shift;does not shift;shifts rightward;shifts leftward
C) shifts upward;shifts downward;shifts rightward;shifts leftward
D) shifts rightward;shifts leftward;does not shift;does not shift
E) shifts rightward;shifts leftward;shifts rightward;shifts leftward

F) B) and E)
G) All of the above

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.The economy is in long-run equilibrium.If the short-run aggregate supply curve shifts leftward from SAS? to SAS?,ceteris paribus,then the actual inflation rate A) is greater than the expected inflation rate. B) is less than the expected inflation rate. C) is the same as the expected inflation rate. D) cannot be determined without more information. E) depends on what happens to wage settlements. Figure 28.1.2 -Refer to Figure 28.1.2.The economy is in long-run equilibrium.If the short-run aggregate supply curve shifts leftward from SAS? to SAS?,ceteris paribus,then the actual inflation rate


A) is greater than the expected inflation rate.
B) is less than the expected inflation rate.
C) is the same as the expected inflation rate.
D) cannot be determined without more information.
E) depends on what happens to wage settlements.

F) C) and D)
G) B) and D)

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 28.1.2 -Refer to Figure 28.1.2.The vertical distance between SAS? and SAS? represents the A) actual inflation rate. B) expected increase in real GDP. C) actual decrease in real GDP. D) expected inflation rate. E) expected decrease in the real wage rate. Figure 28.1.2 -Refer to Figure 28.1.2.The vertical distance between SAS? and SAS? represents the


A) actual inflation rate.
B) expected increase in real GDP.
C) actual decrease in real GDP.
D) expected inflation rate.
E) expected decrease in the real wage rate.

F) A) and B)
G) B) and E)

Correct Answer

verifed

verified

Which one of the following can create a demand-pull inflation?


A) a sharp increase in the price of oil
B) higher wages negotiated by unions
C) a cut in the interest rate
D) a decrease in investment as a result of a decrease in expected future profits
E) a decrease in government expenditure on goods and services

F) C) and D)
G) B) and C)

Correct Answer

verifed

verified

Use the figure below to answer the following question. Use the figure below to answer the following question. Figure 28.1.4 -Refer to Figure 28.1.4.The figure illustrates an economy initially in equilibrium at point A.If the quantity of money is expected to increase by 50 percent,what is the rational expectation of the price level? A) 100 B) 120 C) 130 D) 150 E) We cannot tell without more information on wage negotiations. Figure 28.1.4 -Refer to Figure 28.1.4.The figure illustrates an economy initially in equilibrium at point A.If the quantity of money is expected to increase by 50 percent,what is the rational expectation of the price level?


A) 100
B) 120
C) 130
D) 150
E) We cannot tell without more information on wage negotiations.

F) A) and E)
G) A) and D)

Correct Answer

verifed

verified

Table 28.2.2 Table 28.2.2 -Refer to Table 28.2.2.The economy's natural unemployment rate is 4 percent.Table 28.2.2 gives some points on the economy's short-run Phillips curve.When the unemployment rate is 4 percent ________. A) actual inflation is greater than expected inflation B) actual inflation is less than expected inflation C) and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect D) and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward E) aggregate demand increases -Refer to Table 28.2.2.The economy's natural unemployment rate is 4 percent.Table 28.2.2 gives some points on the economy's short-run Phillips curve.When the unemployment rate is 4 percent ________.


A) actual inflation is greater than expected inflation
B) actual inflation is less than expected inflation
C) and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect
D) and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward
E) aggregate demand increases

F) None of the above
G) A) and E)

Correct Answer

verifed

verified

According to real business cycle theory,workers' decisions to work now versus later depend on


A) the real wage rate today but not the real wage rate in the future.
B) the money wage rate.
C) the real interest rate.
D) labour productivity.
E) none of the above.

F) A) and B)
G) C) and D)

Correct Answer

verifed

verified

Showing 61 - 80 of 101

Related Exams

Exam 1

What Is Economics?

198 Questions

Exam 2

The Economic Problem

143 Questions

Exam 3

Demand and Supply

178 Questions

Exam 4

Elasticity

168 Questions

Exam 5

Efficiency and Equity

108 Questions

Exam 6

Government Actions in Markets

119 Questions

Exam 7

Global Markets in Action

129 Questions

Exam 8

Utility and Demand

110 Questions

Exam 9

Possibilities, Preferences, and Choices

113 Questions

Exam 10

Organizing Production

104 Questions

Exam 11

Output and Costs

133 Questions

Exam 12

Perfect Competition

118 Questions

Exam 13

Monopoly

107 Questions

Exam 14

Monopolistic Competition

111 Questions

Exam 15

Oligopoly

97 Questions

Exam 16

Externalities

112 Questions

Exam 17

Public Goods and Common Resources

89 Questions

Exam 18

Markets for Factors of Production

119 Questions

Exam 19

Economic Inequality

117 Questions

Exam 20

Measuring GDP and Economic Growth

127 Questions

Exam 21

Monitoring Jobs and Inflation

112 Questions

Exam 22

Economic Growth

90 Questions

Exam 23

Finance, Saving, and Investment

142 Questions

Exam 24

Money, the Price Level, and Inflation

115 Questions

Exam 25

The Exchange Rate and the Balance of Payments

114 Questions

Exam 26

Aggregate Supply and Aggregate Demand

124 Questions

Exam 27

Expenditure Multipliers: The Keynesian Model

158 Questions

Exam 29

Fiscal Policy

91 Questions

Exam 30

Monetary Policy

88 Questions

Exam 31

International Trade Policy

116 Questions

Show Answer