Homework Answers
12) individuals pursue the public interest not their own self interest.
13) outward to the right at the same speed as aggregate supply
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QUESTION 12 Which of the following statements about the classical model of the economy is FALSE?...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than full employment real Gross Domestic Product (GDP) is called a(n) A) demand gap. C) recessionary gap B) employment gap D) inflationary gap 14) 14) Economic growth will NOT result in inflation if aggregate demand shifts A) outward to the right at the same speed as aggregate supply B) outward to the right as aggregate supply shifts inward to the left. C) inward to the...
(6) Imagine that the economy is in a recession. Which one of the following tactics is...
(6) Imagine that the economy is in a recession. Which one of the following tactics is a way to increase output by shifting aggregate demand outward? Raising taxes to increase the government surplus Increasing government spending Increasing the required reserve ratio Imposing tariffs on foreign goods (7) In the short run, supply shocks cause prices to __________ and the quantity demanded to __________. increase; increase increase; decrease decrease; increase decrease; decrease (8) Good deflation...
Question 1 1 pts If an economist needs to use a model that collectively reflects the...
Question 1 1 pts If an economist needs to use a model that collectively reflects the interconnections and the entire market supply and demand relationships, which model is the best to use? The general equilibrium model. The cyclical unemployment model. The AD-AS model During the winter of 2014/2015 oil prices dropped by a large percentage compared to the summer of 2014 By March 2015, what changed? There was a shift to the left in the aggregate demand curve. There was...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax incentives Private investment (2) Which of the following statements helps to explain why the economy can be slow to recover from a recession? Workers are less motivated because of reduced expectations, which reduces total output. There is not as much money in circulation to fuel new investment. Wages do not fall quickly, which delays an adjustment to a higher output level....
Which of the following statements is correct? A. A recession is a long-run alternation between economic...
Which of the following statements is correct? A. A recession is a long-run alternation between economic upturns and downturns. B. A recession leads to higher employment and income. C. A depression occurs when the economic downturn becomes extremely deep and prolonged. D. An economic expansion is a decrease in the level of economic activity, and of the goods and services available. QUESTION 53 Which of the following statements is not correct? A. Currency in circulation is the largest part of...
The figure below depicts the aggregate demand curve (AD) and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.
The figure below depicts the aggregate demand curve (AD) and the long-run aggregate supply curve (LRAS) for the United States. The economy is initially at long-run equilibrium, at point A.One of the most contentious issues among economists involves the economy’s adjustment to long-run equilibrium. Some economists believe that adjustment can and should occur naturally. This group, the classical economists, stresses the importance of aggregate supply. Others see the return to long-run equilibrium as an adjustment that occurs unpredictably and often...
9. Consider a Classical model with the following specifications in Q1, 2019: . Labor Supply: NS-1%,...
9. Consider a Classical model with the following specifications in Q1, 2019: . Labor Supply: NS-1%, Cobb-Douglas Production Function . The Quantity Theory of Money accurately describes aggregate demand, The Theory of Distribution holds, Parameter values: [y, a, A, K, M, V] [30,0.3, 130, 500, 2500,40]. Suppose a reduction in labor law regulations leads to an outward shift in labor supply, represented as an increase in y from 30 to 32 during Q2, 2019. Assume that everything else stays the...
please help Question 4 Which statement best characterizes what happens to the aggregate demand curve when...
please help
Question 4 Which statement best characterizes what happens to the aggregate demand curve when the price level rises? a. A rise in the price level moves the economy leftward along the aggregate demand curve. b. A rise in the price level shifts the aggregate demand curve to the left. C. A rise in the price level moves the economy rightward along the aggregate demand curve. d. A rise in the price level shifts the aggregate demand curve to...
te G Which of the follo... True O False Question 13 4 pts A change in...
te G Which of the follo... True O False Question 13 4 pts A change in the money supply or a change in velocity will change aggregate demand, which causes the aggregate demand curve to shift. O True O False Question 7 4 pts Suppose the economy is at below full employment. To improve this situation, Keynesian economists might propose that the government should expenditures, which will cause the aggregate demand curve to shift to the in an attempt to...
6. Consider the following statements about the macroeconomy. For each, indicate whether the statement best distinguishe...
6. Consider the following statements about the macroeconomy. For each, indicate whether the statement best distinguishes the strict Keynesian view, strict classical view, or neither of these views a. All prices are completely flexible. b. The primary focus is on aggregate supply. c. Spending is the key determinant of output. d. Capital is the key source of economic growth. e. Saving can be detrimental to the economy. f. The macroeconomy generally takes care of itself. g. Every dollar borrowed requires...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than full employment real Gross Domestic Product (GDP) is called a(n) A) demand gap. C) recessionary gap B) employment gap D) inflationary gap 14) 14) Economic growth will NOT result in inflation if aggregate demand shifts A) outward to the right at the same speed as aggregate supply B) outward to the right as aggregate supply shifts inward to the left. C) inward to the...
Question 1 1 pts If an economist needs to use a model that collectively reflects the interconnections and the entire market supply and demand relationships, which model is the best to use? The general equilibrium model. The cyclical unemployment model. The AD-AS model During the winter of 2014/2015 oil prices dropped by a large percentage compared to the summer of 2014 By March 2015, what changed? There was a shift to the left in the aggregate demand curve. There was...
Which of the following statements is correct? A. A recession is a long-run alternation between economic upturns and downturns. B. A recession leads to higher employment and income. C. A depression occurs when the economic downturn becomes extremely deep and prolonged. D. An economic expansion is a decrease in the level of economic activity, and of the goods and services available. QUESTION 53 Which of the following statements is not correct? A. Currency in circulation is the largest part of...
9. Consider a Classical model with the following specifications in Q1, 2019: . Labor Supply: NS-1%, Cobb-Douglas Production Function . The Quantity Theory of Money accurately describes aggregate demand, The Theory of Distribution holds, Parameter values: [y, a, A, K, M, V] [30,0.3, 130, 500, 2500,40]. Suppose a reduction in labor law regulations leads to an outward shift in labor supply, represented as an increase in y from 30 to 32 during Q2, 2019. Assume that everything else stays the...
please help
Question 4 Which statement best characterizes what happens to the aggregate demand curve when the price level rises? a. A rise in the price level moves the economy leftward along the aggregate demand curve. b. A rise in the price level shifts the aggregate demand curve to the left. C. A rise in the price level moves the economy rightward along the aggregate demand curve. d. A rise in the price level shifts the aggregate demand curve to...
te G Which of the follo... True O False Question 13 4 pts A change in the money supply or a change in velocity will change aggregate demand, which causes the aggregate demand curve to shift. O True O False Question 7 4 pts Suppose the economy is at below full employment. To improve this situation, Keynesian economists might propose that the government should expenditures, which will cause the aggregate demand curve to shift to the in an attempt to...
6. Consider the following statements about the macroeconomy. For each, indicate whether the statement best distinguishes the strict Keynesian view, strict classical view, or neither of these views a. All prices are completely flexible. b. The primary focus is on aggregate supply. c. Spending is the key determinant of output. d. Capital is the key source of economic growth. e. Saving can be detrimental to the economy. f. The macroeconomy generally takes care of itself. g. Every dollar borrowed requires...
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