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Ans.- (C)
According to classical economics, an economy always operates at the full employment level of output. Moreover, the market is selft regulating, there is no need to intervene in the market.Classical economists believe that real variables like output and investment are not determined by nominal variables .
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Classical economists believe that O A. short - run fluctuations are too infrequent and mild to...
Chapter 14. Question 2. For example, an increase in the money supply, a (real or nominal?)...
Chapter 14. Question 2.
For example, an increase in the money supply, a (real or
nominal?) variable, will cause the price level, a
(nominal or real?) variable, to increase but will
have no long-run effect on the quantity of goods and services the
economy can produce, a (nominal or real?)
variable. The separation of real variables and nominal variables is
known as (the classical dichotomy, price neutrality, or the
quantity theory?).
The horizontal axis of the model of aggregate demand...
7. Most economists believe that prices are: a) flexible in the short run but many are sticky in the long run. b) flexibl...
7. Most economists believe that prices are: a) flexible in the short run but many are sticky in the long run. b) flexible in the long run but many are stick in the short run. c) sticky in both the short and long runs. d) flexible in both the short and long runs. 8. If the short run aggregate supply curve is horizontal, then changes in aggregate demand affect: a) level of output but not prices. b) prices but not...
All societies experience short-run economic fluctuations around long-run trends. These fluctuations are irregular and largely unpredictable....
All societies experience short-run economic fluctuations around long-run trends. These fluctuations are irregular and largely unpredictable. When recessions do occur, real GDP and other measures of income, spending, and production fall, and unemployment rises. Any event or policy that raises consumption, investment, government expenditures, or net exports at a given price level increases aggregate demand, vice versa. Questions a) Which variable, investment or consumer spending has more affect on the business cycle? Why? (6 points) b) Name two macroeconomic variables...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the short-run equilibrium, a) Output will be equal to its natural level. b) Output will be above its natural level. O c) Unemployment will be equal to the natural rate of unemployment. d) Output will be below its natural level. Facebl» wides anಂಕು Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? a)...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregat...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
1.How does Keynes differ in his view on Say’s Law from the classical economists? 2.What is...
1.How does Keynes differ in his view on Say’s Law from the classical economists? 2.What is the difference between an open economy and a closed economy? 3.True or False Consumption is the smallest part of TE. 4.Our economy is at a decrease of $400 billion dollars from our natural real GDP. What is the state of the economy? What does Keynesian economist believe should be done? The government increases its spending $70 billion dollars. At the same time, consumption decreases...
The figure to the right depicts the short run outcome for a firm in a monopolitically...
The figure to the right depicts the short run outcome for a firm in a monopolitically competitive Industry To maximize profits this firm should produce units of output (Enter your response rounded to the nearest whole number) Monopolistically Competitive Firm MC 126 116 SRATC Dollar per un 2 D a MR 104 0 48 Output Which of the following applies to both monopolistic competition and perfect competition? OA. Non-price competition is common OB. All firms sell an identical product OC....
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run...
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run egun A) where the IS and LA curves intersect. Where the IS curve. Meurve. and FE lines inters C) where the IS curve intersects the FB fine. D) where the LM curve intersects the Fence he money supply will cause 27 In the Keynesian model in the short A) a decrease in output and an increase in the real B) an increase in the...
Question 27 (1 point) ✓ Saved According to the Classical Theory of Inflation: an increase in...
Question 27 (1 point) ✓ Saved According to the Classical Theory of Inflation: an increase in the price level causes the CPI index to fall to offset the increase. there is no relationship between price level increases and the value of money. These are two completely unrelated concepts. when the overall price level increases, the value of money also increases since it takes more money to purchase the same quant of goods as before. when the overall price level increases,...
PLS ANSWER ALL ASAP!!! THANKS!! QUESTION 1 Which of the following is included in the calculation...
PLS ANSWER ALL ASAP!!! THANKS!!
QUESTION 1 Which of the following is included in the calculation of national income? indirect business taxes O compensation of employees rental income all of the above none of the above none of the above QUESTION 4 Rapid growth of the money supply might seem appropriate to economists, because Keynesian; the resulting inflation will have no effect on real output Keynesian; it can hasten the economy's return to a long-run equilibrium classical; stabilizing fluctuations contributes...
Chapter 14. Question 2.
For example, an increase in the money supply, a (real or
nominal?) variable, will cause the price level, a
(nominal or real?) variable, to increase but will
have no long-run effect on the quantity of goods and services the
economy can produce, a (nominal or real?)
variable. The separation of real variables and nominal variables is
known as (the classical dichotomy, price neutrality, or the
quantity theory?).
The horizontal axis of the model of aggregate demand...
All societies experience short-run economic fluctuations around long-run trends. These fluctuations are irregular and largely unpredictable. When recessions do occur, real GDP and other measures of income, spending, and production fall, and unemployment rises. Any event or policy that raises consumption, investment, government expenditures, or net exports at a given price level increases aggregate demand, vice versa. Questions a) Which variable, investment or consumer spending has more affect on the business cycle? Why? (6 points) b) Name two macroeconomic variables...
If the short-run aggregate supply decreases by more than the long-run aggregate supply, then, at the short-run equilibrium, a) Output will be equal to its natural level. b) Output will be above its natural level. O c) Unemployment will be equal to the natural rate of unemployment. d) Output will be below its natural level. Facebl» wides anಂಕು Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? a)...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
The figure to the right depicts the short run outcome for a firm in a monopolitically competitive Industry To maximize profits this firm should produce units of output (Enter your response rounded to the nearest whole number) Monopolistically Competitive Firm MC 126 116 SRATC Dollar per un 2 D a MR 104 0 48 Output Which of the following applies to both monopolistic competition and perfect competition? OA. Non-price competition is common OB. All firms sell an identical product OC....
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run egun A) where the IS and LA curves intersect. Where the IS curve. Meurve. and FE lines inters C) where the IS curve intersects the FB fine. D) where the LM curve intersects the Fence he money supply will cause 27 In the Keynesian model in the short A) a decrease in output and an increase in the real B) an increase in the...
Question 27 (1 point) ✓ Saved According to the Classical Theory of Inflation: an increase in the price level causes the CPI index to fall to offset the increase. there is no relationship between price level increases and the value of money. These are two completely unrelated concepts. when the overall price level increases, the value of money also increases since it takes more money to purchase the same quant of goods as before. when the overall price level increases,...
PLS ANSWER ALL ASAP!!! THANKS!!
QUESTION 1 Which of the following is included in the calculation of national income? indirect business taxes O compensation of employees rental income all of the above none of the above none of the above QUESTION 4 Rapid growth of the money supply might seem appropriate to economists, because Keynesian; the resulting inflation will have no effect on real output Keynesian; it can hasten the economy's return to a long-run equilibrium classical; stabilizing fluctuations contributes...
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