Macroeconomics - Chapter 5

Macro﷯﷯﷯ ﷯﷯﷯﷯ ﷯﷯ ﷯﷯﷯﷯﷯
  
Created Sep 4, 2009
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Side ASide B
1. The ultimate objective of macroeconomics is to a. reduce the unemployment rate b. stabilize...
c
2. Which of the following statements regarding Gross Domestic Product is not true? a. It...
a
3. Which of the following is a stock variable? a. business spending on capital...
c
4 Which of the following best describes a flow (rather than a stock)? a. you own...
d
5. While economic expansions average about three and one half years in duration, economic contractions...
a
6. A recession is best defined as a period during which a. the percentage of the...
b
7. Long-term growth in production can be partially explained by a. trade surpluses...
d
8. A period of sustained growth of output in the economy is referred to as a(n) a. Expansion b. Contraction c. Peak d. Trough e. Recession
a
9. A period of sustained decline of output in the economy is known as a(n) a. Expansion b. growth...
e
10. By a leading economic indicator, economists mean a. an indicator of...
a
11. When economists refer to the economy’s price level, they mean a. the...
c
12 Which of the following explains why the aggregate demand curve slopes downward? a. If...
a
13 Which of the following is true of the aggregate supply curve? a. It portrays...
d
14. An increase in the price level will cause a. an increase in the quantity of...
a
15. A decrease in the price level will cause a. an increase in the quantity of...
b
16. Equilibrium of aggregate supply and aggregate demand is best described as a situation in...
c
17. Given the following aggregate demand and aggregate supply schedules, determine the equilibrium...
e
18. If the economy were initially in equilibrium and the aggregate demand curve shifted to...
a
19. The laissez-faire approach popular before the Great Depression influenced the U.S. government...
b
20. According to Adam Smith's The Wealth of Nations, in order to get an economy out...
e
21. Adam Smith's "invisible hand" explains a. why people act in their own best...
c
22. An increase in the price level a. means that the aggregate demand curve has...
b
23. An increase in government spending, other things constant, would cause a a. leftward...
d
24. Which is true of John Maynard Keynes? a. He believed that serious economic...
d
25. Which of the following best describes the Keynesian approach to economic policy? a. supply-side b. Classical c. demand-side d. Mercantilist e. laissez-faire
c
26. The Keynesian approach to fiscal policy calls for a. budget deficits during...
d
27. The Employment Act of 1946 a. guaranteed full employment b. obliged...
d
28. Fine-tuning the economy means a. making government economic policy more "people...
b
29. In the 1960s, government policy makers believed that they could a. stabilize...
e
30. Inflation is a. a rise in the value of money b. a decline in nominal...
c
31. If spending by the federal government exceeds revenue, a. the price level tends...
e
32. Suppose the economy is initially in equilibrium and then an energy shock occurs, such as...
d
33. Stagflation refers to a. a simultaneous reduction in output and the price level b. a...
d
34. To control inflation, President Nixon a. ordered wage and salary reductions...
e
35. On an aggregate demand and aggregate supply graph, the stagflation of the 1970s can be...
a
36. Keynesian policies are ineffective at combating stagflation because stagflation is caused...
b
37. An increase in aggregate supply will result in a. lower levels of employment b. a...
e
38. If the government owes $3,500 billion and then borrows $300 billion more this year, a. the...
b
39. Which of the following statements is correct? a. A budget deficit is a flow...
a
40. The aim of supply-side economics is to a. increase government spending to stimulate...
d


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