Macro Exam 3
based in the info provided in the graph the marginal propensity to consume equals
0.375
based on info provided in the graph, the marginal propensity to consume equals
0.375
if an economy's GDP will double in 40 years, then its growth rate must be about
1.75
if an economy's GDP will double in 40 years. then its growth rate must be about
1.75%
based on the info provided in the graph, at a income level of 200 savings equals _____ and the APC equals ____
125; 1.625
suppose 10 cooks work 5 hours each to produce 1000 hamburgers. what is the productivity of the cooks?
20 burgers an hour
equilibrium output is ______ units and the equilibrium price level is ____
225 &110
if disposable income is 4500 and saving is 1400, how much is consumption?
3100
if a disposable income is 5000 and savings is 1800 hoe much is consumption?
3200
if the marginal propensity to consume is 0.8 then the mutiplwr is
5
based on the info provided in the graph, at an income level of 500, savings equal ___ and the APC equals
50; 0.9
if the growth rate in a economy is 10% then its GDP will double in about
7 years
if the growth rate in an economy is 10% then its GDP will double in about
7 years
which of the following equations is correct
AE= C+I + G + (X-M)
in the Keynesian Macroeconomics equilibrium
AE= Y & S=I
in the Keynesian macro equilibrium
AE=Y & S=I
_____ inflation occurs when a supply shock reduces aggregate supply
Cost- push
____ inflation occurs when aggregate demand expands so much that equilibrium output exceeds full employment output and the price level rises
Demand- pull
if a country's population increases at a slower rate than the growth in its real GDP
GDP per capita is increased
if a country's population increases at a slower rate than then growth in its real GDP
GDP per captia has increased
which of the following best illustrates the wealth effect?
Jones family has 50000 in a bank. prices in the market rose dramatically, diminishing their purchasing power by 50000
if technology improves the short run aggregate supply curve will shift from SRS0 to ____ and the price level will be at ____
SRAS1; P1
the real GDP that firms will produce at varying price levels is
aggregate supply
the real GDP that firms will produce at varying price levels is:
aggregate supply
according to the textbook, what brought the US out of the Great depression
an increase in spending on WWII
which of the following mat be an explniatino for the shift in the aggregate demand from line B to line A
consumer confidence declines and consumption spending falls
which of the following may be an explanation for the shift in aggregate demand from line B to line A?
consumer confidence declines and consumption spending falls
___ in flation occurs when a supply shock reduces aggregate supply
cost -push
an ____ in market power and an ____ in regulation will shift the short run aggregate supply curve to the right
decrease; decrease
an ____ in govt spending, a ____ domestic currency, and ____ interest rates will shift a country's aggregate demand to the left
decrease; stronger; higher
____ inflation occurs when aggregate demand expands so much that equilibrium output exceeds full employment output and the price level rises
demand - pull
_____ inflation occurs when aggregate demand expands so much that equilibrium output exceeds full employment output and the price level rises
demand pull
long run growth is MOST likely to be achieved by promoting
development of new technologies
long run growth is most likely to be achieved by promoting
development of new technologies
the aggregate demand curve slopes ___ and has ____ on the vertical axis
downward; price level
which of the following statements is not true?
economic growth ALWAYS leads to a more equitable distribution of income
according to the figure of ADAS curves and assuming the country begins on AD1 and SRAS1, what will happen in the short & long run if govt spending rises?
economy will move to point C to A to B
in the Keynesian model, the price level is ____; in the aggregate demand and supply model, the price level is___
fixed; flexible
the capital to labor ratio is
high in rich countries
As a general rule, the more capital employed with workers, the ____ their productivity and the ___ their earnings.
higher; higher
the economy is currently at p0 and q0. the figure below depicts an economy
in short run equilibrium only
which of the following events cause a decrease in aggregate demand?
income in interest rates
which of the following events causes a decrease in aggregate demand
increase in interest rates
According to the textbook, what brought the United States out of the Great Depression?
increase in spending on WWII
which of the following causes a decrease in aggregate demand?
increase in taxes
an increase in the incomes of the countries that purchase US made products will cause an ____in the _____ US made products
increase; aggregate demand for
an _______ in oil prices and an ____ in taxes will shift short run aggregate supply to the left
increase; increase
in the long run, attempts to expand beyond an economy's natural rate of unemployment tend to result in
increased inflation
an income increases, consumption
increases at a slower rate
as income increases, consumption
increases at a slower rate
which is a source of positive productivity growth
increasing quality of labor
the ___ effect is a reason for the negative slope of the aggregate demand curve
interest rate
if US aggregate price level rises
interest rates go up
a shift of the _____ of the____ curve would cause the price level and employment to decrease
left; aggregate demand
a shift to the _____ of the ____ curve would cause the price level and employment to decrease
left; aggregate demand
the capital to labor ratio is
low in poor countries
as a general rule, the less capital employed with workers, _____ their productivity and _____ their earnings
lower; lower
physical capital includes
manufactured products that are used to produce other goods and services
_____is the change in consumption associated w a change in income
marginal propensity to consume
the reason business investment is sensitive to interest rates its that
most funds used for investments are borrowed so firms can incur an inferest charge
which is NOT a source of productivity growth?
moving resources from production to pension benefits
if the US aggregate price level falls
net exports rise
refer to the PPF. which panel corresponds with short run growth
panel A
economic growth is most accurately measured using
real GDP per capita
because of the wealth effect, a rising aggregate price level ___ the purchasing power of wealth and therefore____ output demanded
reduces; reduces
a shift of the ____ of the ____ curve will cause the price level and employment to increase
right; aggregate demand
a shirt to the ___ of the____curve will cause the price level and employment to increase
right; aggregate demand
increased consumer confidence will shift the aggregate demand curve to the _____ and ____ output demand
right; increase
if investment increases from 500 billion to 550 billion and the marginal propensity to consume is 2/3 then equilibrium income will
rise by 150 billion
improvements in production capacity will
shift the PPF outward
if a pill is discovered that allows people to work twice as fast as they would ordinarily work, then the aggregate supply curve will:
shift to the right
economic growth is shown as a
shift to the right of the long run aggregate supply curve
economic growth is shown as
shift to the right of the long- run aggregate supply curve
a production function
shows the output that is produced using different combinations of inputs combined with existing technologies
a production function
shows the output that is produced using different combinations of inputs combined with existing technology
investment spending
tends to be violate
according to the figure of ADAS curves and assuming the country begin on the AD1 and SRAS1 what will happen in the short and long run if govt spending riseS?
the economy will move for C to E to B
which of the following did classical economists believe would happen if then economy experienced a downturn?
the economy would self correct
if a country's population increases at a higher rate than the growth in its real GDP
the standard of living in the country has declined
the figure shows the aggregate expenditure line for an economy. which is the proper sequence of events if originally at 500 ?
total income exceeds spending, firms reduce production, workers are laid off and incomes fall until equilibrium is reached
the figure shows the aggregate expenditures line for an economy, which is the proper sequence of events if income was originally at 500?
total income exceeds spending,firms reduce production, workers are laid off and incomes fall until equilibrium is reached
the ___ effect is a reason fro the negative slope of the aggregate demand curve
wealth
the ____ effect is a reason for the negative slope of the aggregate demand curve
wealth
infrastructure is
a country's public capital
which will NOT cause the aggregate demand curve to shift?
a rise is aggregate price level causes a decline in exports
