ECON102 Final

The period when output and living standards decline is referred to as: A. Inflation B. Economic decline C. An inventory downturn D. A recession

A recession

Which would be considered one of the factors that shift the aggregate supply curve in the short run? A. Profit expectations on investment projects B. Government regulation C. Personal income taxes D. Consumer spending

Government regulation

The lag between the time that the need for fiscal action is recognized and the time it is actually taken is referred to as the: A. Operational lag B. Recognition lag C. Administrative lag D. Crowding-out lag

Administrative lag

High rates of unemployment: A. Indicate that society is not using a large portion of the talent and skills of its people B. Are associated with higher price level C. Always correspond to a decrease in nominal GDP D. Do not affect an economy's output of goods and services

Indicate that society is not using a large portion of the talent and skills of its people

The real-balances effect indicates that: A. an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending. B. a lower price level will decrease the real value of many financial assets and therefore reduce spending C. a higher price level will increase the real value of many financial assets and therefore increase spending D. a higher price level will decrease the real value of many financial assets and therefore reduce spending

a higher price level will decrease the real value of many financial assets and therefore reduce spending.

In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $40.50 billion B. $20 billion C. $31.25 billion D. $10 billion

$20 billion

The Great Recession that started in 2007 was triggered by shocks in which of the following economic sectors? A. Gold market and stock market B. International trade and foreign exchange markets C. Real estate and financial markets D. Consumer and government spending

Real estate and financial markets

Kevin has lost his job in an automobile plant because the company switched to robots for its welding step in the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is: A. Cyclical B. Frictional C. Structural D. Natural

Structural

If the government wishes to increase the level of real GDP, it might reduce: A. Transfer payments B. Taxes C. Its purchases of goods and services D. The size of the budget deficit

Taxes

The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will: A. increase the amount of U.S. real output purchased B. increase U.S. imports and decrease U.S. exports C. increase both U.S. imports and U.S. exports D. decrease both U.S. imports and U.S. exports

increase U.S. imports and decrease U.S. exports

If the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, then the unemployment rate would be: A. 4 percent B. 6 percent C. 8 percent D. 10 percent

8 percent

An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the: A. net export effect B. wealth effect C. real-balances effect D. multiplier effect

multiplier effect

An increase in net exports will shift the AD curve to the: A. left by a multiple of the change in investment B. left by the same amount as the change in investment C. right by the same as the change in investment D. right by a multiple of the change in investment

right by a multiple of the change in investment

One timing problem in using fiscal policy to counter a recession is the "operational lag" that occurs between the: A. Start of the recession and the time it takes to recognize that the recession has started B. Start of a predicted recession and the actual start of the recession C. Time fiscal action is taken and the time that the action has its effect on the economy D. Time the need for the fiscal action is recognized and the time the action is taken

time fiscal action is take and the time that the action has its effect on the economy

A peak in the business cycle: A. Occurs when the unemployment rate is its greatest B. Occurs when the inflation rate is its lowest C. Is a temporary maximum point D. Is a temporary minimum point

Is a temporary maximum point

Which of the following would not shift the aggregate demand curve? A. A change in the price level B. Depreciation of the international value of the dollar C. A decline in the interest rate at each possible price level D. An increase in personal income tax rates

A change in price level

With cost-push inflation in the short run, there will be: A. A decrease in real GDP B. A decrease in unemployment C. An increase in real GDP D. A leftward shift in the aggregate demand curve

A decrease in real GDP

In an economy, the government wants to decrease aggregate demand by $48 billion at each price level to decrease real GDP and control demand-pull inflation. If the MPS is 0.25, then it could: A. Increase taxes by $16 billion B. Increase taxes by $24 billion C. Decrease government spending by $16 billion D.Decrease government spending by $10 billion

Increase taxes by $16 billion

An increase in the overall prices in an economy is called: A. Growth B. Expansion C. Inflation D. Nominal GDP growth

Inflation

Real gross domestic product is a measure of the: A. Average price level in the economy B. Value of final output produced within a country in one year, using current prices C. Value of final output produced within a country in one year, adjusted for changing prices D. Total value of available resources in a nation

Value of the final output produced within a country in one year, adjusted for changing prices

The interest-rate effect suggests that: A. a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending. B. an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending. C. an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. D. an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.

an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption in investment spending