Unit 2 and 3 MC

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Which effect describes the fact that when the price level increases the interest rate increases and consumption decreases

Interest rate effect

The value of GDP in 2010 in 2000 prices was

$600

If the spending multiplier is 5 the value of the tax multiplier is

-4

If 2010 were made the base year for the GDP price deflator index the value of the index number for 2000 would be

42

Which of the following best describes the short-run aggregate supply curve?

A curve indicating the level of real output that will be produced at each possible price level

If the marginal propensity to consumer is two thirds then an increase in personal income taxes of $100 will most likely result in

A decrease in consumption of 67$ and a decrease in savings of $33

Which of the following will increase aggregate demand

A decrease in personal income taxes

Which of the following people would be considered unemployed

A person who stayed home to raise his children and now starts looking for a job

Of the following which is the best example of structural employment

A steel worker who is replaces by a robot

If the price index in a country were 100 for the year 2010 and 120 for 2015 and nominal GDP in 2015 were $480 billion then real GDP for 2015 in 2010 dollars would be

About 400 billion

Rising input price will shift which curve and create which type of inflation

Aggregate Supply. Cost push

Which of the following shifts the short run aggregate supply curve to the right

An increase in government spending

In the circular flow diagram which of the following is true in the product market

Business firms sell goods and services to house holds

Investment demand increases as the result of

Businesses becoming more optimistic with respect to future business conditions

If Maria escalera's disposable income increases from 600 to 800

Consume is .8

In the GDP the largest dollar amount is

Consumer spending

A change in which of the following will cause the aggregate demand curve to shift

Consumer wealth

An increase in personal income taxes will most likely result in which of the following changes in real GDP and the price level in the short run?

Decrease Decrease

A sustained increase in oil prices would most likely cause short run and long run aggregate supply curves and the production possibilities curve to change in which of the following ways

Decrease decrease shift inward

Too much money chasing too few goods describes

Demand pull inflation

The market value of al final goods and services produced in the economy in a given year

GDP

Which of the following is the best measure of the production output of an economy

GDP

Which of the following would be an example of an intermediate good or service?

Gasoline purchased by an insurance agent to visit clients at their homes

Which of the following would be included in the calculation of GDP

Gov purchase of a new submarine

In the circular flow diagram which of the following is true in resource factor markets

Households sell resources to business firms

Suppose a factory added $5000 worth of output this year. Incidentally the waste from this factory cause $1,000 worth of loss to the neighboring waterways. As a result GDP product will

Increase by 5,000

A rightward shift in the aggregate demand curve will cause employment and the price level to change in which of the following ways in the short run

Increase increase

A rapid increase in successful research and development projects for the nation will most likely result in which of the following changes in the short run and the long run aggregate supply curves and the production possibilities curve?

Increase increase outward

Which of the following statements is true about actual employment

It is below full employment in a recession

An increase in the capital stock will cause the

Long run aggregate supply curve to shift right

The numerical value for the spending multiplier increases as the value of the

MPS decreases

Which of the costs of inflation does the following statement illustrate? "When there is inflation grocery store have to update the prices associated with the bar codes on their products.

Menu costs

The change in real GDP that occurs when an increase in the price level leads to a change in the relative prices of imports and exports is a result of the

Net export effect

Which of the following purchases is included in the calculation of GDP

New harvesting equipment for the farm

Which of the following is true if real GDP in Year 1 is 5,000 and in year 2 is 5,200

Output has increased by 4 percent

In which of the following ways will increases in short-run aggregate supply change the price level and unemployment

Price level decrease unemployment decrease

The short run aggregate supply curve will shift to the right when

Prices of inputs decrease

An increase in labor productivity would most likely cause real gross domestic product and the price level to change in which of the following ways?

Real GDP Increase Price level decrease

Which of the following is a leakage from the circular flow of economic activity

Saving

The short run aggregate supply curve slopes upward because of

Sticky wages and prices

Which of the following would be counted as investment when calculating GDP

The construction of a new house

As the average price level decreases the purchasing power of people's cash balances increases. This results in an increase in spending. This effect is called

The real balance effect

One of the reasons the aggregate demand curve is downward sloping is that as the value of cash balances decreases, aggregate spending decreases this is called

The real balance effect

When the actual inflation rate is greater than the anticipated inflation rate which of the following is most likely to suffer?

Those who lend at a fixed interest rate

The largest dollar amount of national income is

Wages and salaries to employees


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