Macro Chapter 1 Learning Curve

Real GDP is often plotted using a logarithmic scale. On such a scale, equal distances represent equal _____ changes.

Percentage

Suppose that the pizza demand function is D(P, Y) = 60 − 10P + 2Y and the pizza supply function is S(P, Pm) = 20P − 20Pm, where P is the price of pizza, Y is aggregate income, and Pm is the price of materials. If Y = 70 and Pm = 5, then the equilibrium price is:

10

Suppose that the pizza demand function is D(P, Y) = 60 − 10P + 2Y, and the pizza supply function is S(P, Pm) = 20P − 20Pm, where P is the price of pizza, Y is aggregate income, and Pm is the price of materials. If Y = 70 and Pm = 5, then the equilibrium price is:

10

Suppose that the pizza demand function is D(P, Y) = 60 − 1P+2Y, and the pizza supply function is S(P, Pm) = 2P − 20Pm, where P is the price of pizza, Y is aggregate income, and Pm is the price of materials. If Y = 70 and Pm = 5, then the equilibrium quantity is:

100

In the United States, real GDP per person in 2015 was about _____ times higher than it was in 1900.

8 times

Economic models:

are simplified explanations of relationships among economic variables.

In a depression, Real GDP is

decreasing

The price of a good is observed to fall at the same time that the quantity purchased falls. This can be explained by a _____ the good.

fall in demand for

The price of a good is observed to rise at the same time that the quantity purchased falls. This can be explained by a _____ the good.

fall in supply of

Between 2000 and 2015, the number of cell phones in use in the United States increased dramatically, while the price of using a cell phone fell. This can be explained by a(n):

increased supply of cell phones.

When _____, the _____ rate tends to decrease.

inflation increases; unemployment

Since the early 1980s, inflation in the United States has been relatively _____ and relatively _____.

low, stable

Economic growth since 2009 has been lower than normal because:

the recovery from the Great Recession have been very slow.

Since 2009 the unemployment rate has generally been higher than normal because:

the recovery from the Great Recession have been very slow.

Most macroeconomists believe that price stickiness is a suitable assumption for studying the behavior of the economy in:

the short run only.

In the supply and demand model, a change in the price of the factors of production will result in a shift in:

the supply curve only.