Studied by 0 people
Looks like no one added any tags here yet for you.
Aggregate Demand Curve
Represents total demand for goods/services in economy.
AreaAdvances in computer and information technology can be illustrated by an
inward shift of the aggregate demand curve.
inward shift of the aggregate supply curve.
outward shift of the aggregate demand curve.
outward shift of the aggregate supply curve.
outward shift of the aggregate supply curve.
Feedback: Incorrect. Advances in technology lead to higher productivity. This can be shown with an outward shift of the aggregate supply curve.
AreaMacroeconomics focuses primarily on the _____ of a nation.
inflation, unemployment, and growth
financial regulations, currency creation, and banking
political structure, policies, and voters
income inequality, redistribution, and income tax policy
inflation, unemployment, and growth
AreaPrice controls on consumer goods during World War II caused a(n) _____ in the economy.
increase in the rate of saving
deflationary pressure
inflationary pressure
fall in the rate of unemployment
inflationary pressure
Price controls on consumer goods during World War II were price caps that set a maximum price (below the equilibrium price) in which a good could be sold. Prices were unable to increase by law.
serves as an indication of a growing economy.
An increase in real GDP
An increase in the minimum wage rate in an economy
An increase in GDP based on current prices
An increase in the price level in an economy
An increase in real GDP
GDP based on current prices cannot be used to measure economic growth. They cannot show whether GDP is increasing or decreasing.
is an example of an abstraction used in macroeconomics.
The interest paid on a bond
The rent on a piece of land
The profit earned by an organization
The price level
Price level
Profit is a goal of firms. This is observed in microeconomics.
AreaAn economic aggregate is
an abstraction used to describe a feature of economic life.
a specific principle used to determine tax rates.
a concept used to describe the changes in the price of a product.
a concept most commonly used in microeconomic analysis.
an abstraction used to describe a feature of economic life.
AreaIn 1973, rising oil prices caused by turmoil in the Middle East caused which two economic events to occur simultaneously?
Deflation and slow growth
High inflation and slow growth
Severe deflation and low unemployment
High inflation and low unemployment
High inflation and slow growth
Rising oil prices would cause a negative supply shock, which leads to stagflation. High unemployment and inflation would occur during slow growth economy.
AreaIdentify a possible effect of an aggregation of many markets into one.
It eliminates inequality in income distribution.
It eliminates individual market differences.
It creates new employment opportunities.
It reduces the supply of labor.
It eliminates individual market differences
is the name given to government programs implemented to prevent or shorten recessions and counteract inflation.
Trade policy
Contractionary fiscal policy
Contractionary monetary policy
Stabilization policy
Stabilization policy
AreaWhich of the following is a possible effect of a leftward shift in the aggregate demand curve and a rightward shift in the aggregate supply curve?
It will lead to a fall in government expenditure.
It will lead to an inflationary pressure.
It will lead to a fall in the price level.
It will lead to an increase in the demand for leisure time.
It will lead to a fall in the price level.
is measured on the vertical axis of the aggregate demand-aggregate supply model.
The nominal GDP
The total volume of exports
The price level
The real GDP
Price level
AreaIdentify the statement that best describes recession.
A recession is a period during which aggregate demand and production falls while unemployment rises.
A recession is a period during which aggregate demand, production, and unemployment increases.
A recession is a period during which aggregate demand increases while unemployment falls.
A recession is a period during which production and unemployment both falls
A recession is a period during which aggregate demand and production falls while unemployment rises
A recession is a period during which aggregate demand,
production fall, while unemployment increases.
AreaThe calculation of GDP will include the
training that a wrestler undergoes before a fight.
work done by an employee at an assembly line.
value of all the household work done by an individual.
time spend by an individual mowing his lawn.
work done by an employee at an assembly line.Household work done by an individual is not an exchange, therefore no transaction occurred. It is not captured in GDP.
AreaWhich of the following is not captured in the United States' GDP?
Legal sports betting in Las Vegas
The Iowa exports of soy to China
The production of new Ford F-150s in Michigan
The two hours you spend folding laundry each Saturday morning
The two hours you spend folding laundry each Saturday morning
AreaWhich of the following comes under the purview of macroeconomics?
A firm's revenue earnings in the past five years
The availability of workforce in a particular labor market
Utility maximization by an individual
The unemployment rate in a country
The unemployment rate in a country
AreaWhich of the following is true of the aggregate demand curve?
The aggregate demand curve shows the quantity of leisure demanded at different wage levels.
The aggregate demand curve shows the quantity of labor demanded at different wage levels.
The aggregate demand curve shows the quantity of foreign products demanded at each price level.
The aggregate demand curve shows the quantity of domestic product demanded at each price level.
The aggregate demand curve shows the quantity of domestic product demanded at each price level.
AreaEconomic growth can be illustrated by a(n) _____ in the aggregate demand-aggregate supply model.
inward shift of the aggregate supply curve
upward movement along the aggregate demand curve
upward movement along the aggregate supply curve
outward shift of the aggregate demand curve
outward shift of the aggregate demand curve
AreaWhich of the following economic policy did the Bush and Obama administrations share?
Decrease in military spending
Increase in the tariff rate
Expansionary fiscal policy
Contractionary monetary policy
Expansionary fiscal policy
AreaStagflation refers to
a fall in the revenue generated by a government through taxation.
a sustained decrease in the general price level in an economy.
a persistent fall in the marginal productivity of a worker.
an increase in the price level when an economy is growing slowly.
an increase in the price level when an economy is growing slowly.
Stagflation occurs when there is high inflation and unemployment in slow growth economy.
AreaIn order to deal with a recessionary pressure, the government uses stabilization policy to
increase aggregate demand.
decrease aggregate supply.
take measures to reduce the price level.
cut down on its expenditure.
increase aggregate demand.
The government would use expansionary fiscal policy in the event of a recession. It could do so by either cutting taxes or increasing government spending. A decrease in aggregate supply would prolong the recession
AreaAccording to Keynes, a pessimistic outlook of an economy leads to a(n)
decrease in the rate of unemployment.
decrease in planned spending.
increase in investment expenditure by households.
increase in exports.
decrease in planned spending.
AreaFrom 1966-73, inflation could not be attributed to
a boost in aggregate demand.
an increase in aggregate supply.
the spending that funded the Vietnam War.
the removal of wage and price controls.
an increase in aggregate supply.
Boost in aggregate demand will raise prices.
AreaThe _____ is measured on the horizontal axis of the aggregate demand-aggregate supply model.
total cost of producing output in an economy
economic growth rate
total output produced in an economy
price level
total output produced in an economy
price level
Total output, or real GDP, is measured on the x-axis of the aggregate demand-aggregate supply model.
due to an outward shift of the aggregate demand curve when the aggregate supply is held constant.
The economy experiences a fall in the rate of employment
The economy experiences inflation
The economy experiences a fall in investment expenditure
The economy experiences a fall in the supply of labor
The economy experiences inflation
AreaIdentify a statement that defines gross domestic product.
The measure of the rate of unemployment in the domestic economy in a year
The measure of the positive and negative externalities caused due to the production of goods and services in the domestic economy within a year
The sum of the money value of all final goods and services produced in the domestic economy within a year
The sum of the money value of all goods and services produced and sold by a foreign firm in the domestic market within a year
The sum of the money value of all final goods and services produced in the domestic economy within a year
AreaWhich of the following is measured in the United States' GDP?
The Christmas money you received from your grandma
The door handles of the wardrobe you purchased at the furniture store
California wines exported to France
The imported Mexican sodas sold at the local taqueria
California wines exported to France
AreaWhich of the following is a difference between real GDP and nominal GDP?
Real GDP measures the rate of savings in an economy, whereas nominal GDP measures the consumption expenditures in an economy.
Real GDP measures the changes in the price level in an economy, whereas nominal GDP measures the changes in the rate of interest in an economy.
Real GDP measures output of goods and services at constant prices, whereas nominal GDP measures the output of goods and services at current prices.
Real GDP measures output of intermediate goods and services at current prices, whereas nominal GDP measures output of intermediate goods and services at constant prices.
Real GDP measures output of goods and services at constant prices, whereas nominal GDP measures the output of goods and services at current prices.
is an example of an intermediate good.
The pizza you buy at Costco
The printer you use at your local copy shop
A motorbike you use to visit your friend on Saturday
The leather seats in your new car
The leather seats in your new car
An intermediate good is
purchased for resale or use in producing another good
AreaInternational GDP comparisons can be misleading because
countries are endowed with different resources.
the fraction of economic activity conducted in organized markets differ from country to country.
each country has demographic differences.
countries differ in political structure.
the fraction of economic activity conducted in organized markets differ from country to country
The share of economic activity that can be measured differs from country to country
AreaIf the price of movie tickets is $10 this year and $11 next year, then 200 movie tickets will contribute
$2,200 to this year's nominal GDP and $2,000 to next year's nominal GDP.
$2,000 to this year's nominal GDP and $2,200 to next year's nominal GDP.
$2,000 to this year's nominal GDP and $2,000 to next year's real GDP.
$2,200 to this year's nominal GDP and $2,200 to next year's nominal GDP.
2,000 to this year's nominal GDP and $2,200 to next year's nominal GDP.
This would contribute to 200$10 = $2,000 toward nominal GDP this year, and 200$11 = $2,200 toward nominal GDP next year.
AreaReal GDP is not
nominal GDP at constant prices.
an aggregate cost of living.
a measurement of production of final goods of a country.
adjusted for inflation.
an aggregate cost of living
The aggregate cost of living is used to measure
Inflation
AreaWhich of the following was suggested by Keynes to move the economy out of depression?
A command economy
Price mechanism
Expansionary monetary and fiscal policies
A capitalist economy
Expansionary monetary and fiscal policies
AreaA macroeconomic benefit of an increase in government spending is that it leads to a(n)
increase in the general price level.
fall in the rate of unemployment.
increase in the supply of labor.
fall in capital formation.
fall in the rate of unemployment.
An increase in government spending increases aggregate demand. This is meant to provide more jobs to the economy and encourage capital spending.
AreaThere is a(n) _____ due to an increase in aggregate demand in an economy.
increase in the rate of saving
increase in the general price level
increase in the rate of unemployment
fall in the demand for workers
increase in the general price level
is a true measure of national output.
The rate of inflation in an economy
The real GDP of a country
The nominal GDP of a country
The rate of unemployment in an economy
The real GDP of a country
AreaA stabilization policy used by a government to reduce inflation leads to an increase in
the rate of interest.
government revenue.
the rate of unemployment.
the demand for laborers.
The rate of unemployment
The government can use restrictive fiscal policy to reduce inflation. This would cause aggregate demand to decrease, which would reduce the price level and output. The rate of unemployment would increase.
What followed the Reagan and Bush administration tax cuts?
High government expenditure
Fall in exports
High budget deficits
Deflation
High budget deficits
Reagan entered office after the Federal Reserve Chair Paul Volcker put the economy into a recession with the use of restrictive monetary policy. The Reagan tax cuts were meant to stimulate the economy. Marginal tax rates were cut for the highest income earners. The Bush tax cuts that were put in place after the recession in 2001 also used to boost the economy. However, with increase in large military spending, both administrations ultimately faced large budget deficits.
as a result of the Great Depression.
There was an increase in the popularity of capitalism
There was a sudden increase in the supply of skilled laborers
People in the United States lost faith in the self-correcting ability of an economy
People in the United States lost faith in the democratic system of governance and stopped casting votes
People in the United States lost faith in the self-correcting ability of an economy
In terms of economic theory, prior to the Great Depression, it was believed that a capitalist economy occasionally misbehaved but had a natural tendency to cure recessions or inflation by itself. The Great Depression was the impetus of stabilization policy.
AreaAggregation refers to
the process of estimating the value added at the different stages of production of a good.
the process of calculating the average income of a household in a country.
the process of combining many individual markets into one overall market.
the process of segregating a market into several smaller markets.
the process of combining many individual markets into one overall market.
AreaIdentify a statement that defines real GDP.
Real GDP is the difference between nominal GDP and depreciation of capital.
Real GDP is the difference between consumption expenditure and net exports.
Real GDP is the money value of all final goods and services produced in an economy within a year.
Real GDP is nominal GDP adjusted for changes in the price level.
Real GDP is nominal GDP adjusted for changes in the price level.
Aggregate Supply Curve
Shows total supply of goods/services available.
Outward Shift
Indicates increase in supply or demand.
Productivity
Measure of output per unit of input.
Macroeconomics
Study of economy-wide phenomena like inflation.
Inflation
Rate at which general price levels rise.
Unemployment
Percentage of labor force without jobs.
GDP
Gross Domestic Product; total economic output.
Economic Growth
Increase in a country's output over time.
Technological Advances
Improvements in technology enhancing productivity.
