Marco Homework

If the government cuts taxes, what will this do to the AD curve? A) AD would not shift B) AD shifts left C) AD shifts right D) AD would shift but in a random direction

AD shifts right

A shift of the long run aggregate supply curve to the right suggests which of the following? A) an increase in productivity B) a decrease in the economic growth C) an increase in tax revenue D) a decrease in the average standard of living

An increase in productivity

The value of cars that the Hyundai Motor, a Korean company, produces in a U.S. plant: A) is a part of U.S. GDP B) is a part of U.S. GNP C) is a part of South Korea's GDP D) is not a part of South Korea's GNP

is a part of U.S. GDP

The aggregated demand curve is negatively sloped in part because of the impact of interest rate on: A) consumption and investment spending B) price level C) government purchases D) potential output

Consumption and investment spending

Reducing government spending, reducing transfer payments, or raising taxes describes which policy? A) expansionary fiscal policy B) contractionary fiscal policy C) supply side fiscal policy D) monetary policy

Contractionary fiscal policy

If government collects $550 millions in taxes and spends $700 billion, it would have a: A) surplus $1,250 billion B) deficit $1,250 billion C) surplus $150 billion D) deficit $150 billion

Deficit $150 billion

The great depression was caused by __________ shocks, and the stagflation of the 1970s was caused by _______________ A) supply; supply B) demand; demand C) demand; supply D) supply; demand

Demand and Supply

In the long run, changes in the aggregate price level will be accompanied by ___________ proportional changes in input prices. A) more than B) opposites C) equal D) less than

Equal

Jennifer did not work during college. She just obtained a bachelor's degree in marketing, and she is now looking for a marketing job in the retail industry. Jennifer is considered: A) frictionally unemployed. B) not in the labor force. C) cyclically unemployed.

Frictionally unemployed

Which one of the following would NOT lead to higher prices? A) an increase in the supply of food B) an increase in the supply of money C) higher gas prices

Higher gas prices

The most important measure in determining whether a country's national debt is a significant problem is: A) the interest rate paid on the debt B) interest paid on the national debt as a portion of GDP C) the size of debt in nominal terms D) the proportion of the national debt that is held by government agencies

Interest paid on the national debt as a portion of GDP

Suppose that the stock market crashes, which causes a large decrease in the value of many households' financial assets. The most likely outcome is a _________ the aggregate demand curve. A) movement down B) movement up C) leftward shift of D) rightward shift of

Leftward shift of

The biggest group missing from the reported unemployment rate is: A) those actively seeking work. B) marginally attached workers. C) those working part time for economic reasons.

Marginally attached workers

In the long run, the aggregate price level has: A) a negative effect on the quantity of aggregate output B) an effect on aggregate output but none on employment C) a positive effect on the quantity of aggregate output D) no effect on the quantity of aggregate output

No effect on the quantity of aggregate output

The aggregated demand curve shows the relationship between the aggregate price level and the aggregate: A) quantity of output demanded by businesses only B) unemployment rate C) quantity of output demanded by households, business, the government , and the rest of the world D) productivity

Quantity of output demanded by households, businesses, the government, and the rest of the world

If an economy is in an overheating, what would contractionary fiscal policy do? A) shift SRAS to the right B) shifts AD to the right C) shift AD to the left D) shift SRAS to the left

Shift AD to the left

Since the invention of automatic teller machines, many bank tellers have lost their jobs. This is an example of _____ unemployment. A) cyclical B) structural C) frictional

Structural

The National Activity Index was developed by: A)The federal Reserve bank of Chicago B) The National Bureau of Economic Research C) the U.S. Treasury D) the Conference Board

The federal Reserve bank of Chicago

The household survey provides a detailed demographic picture of _____, and the payroll survey provides detailed information _____. A) the labor market; by industry and region B) consumer spending; by industry and region C) consumer spending; about business spending

The labor market; by industry and region

wages that are higher than equilibrium can lead to: A) overemployment. B) a labor shortage. C) unemployment.

Unemployment

The long run aggregate supply curve is: A) downward sloping B) vertical C) horizontal D) upward sloping

Vertical

The short run aggregate supply curve is positively sloped because: A) profit is lower when prices increase, so output decreases B) workers are willing to work for lower wages rather than be laid off C) wages and other costs of production respond immediately to changes in prices D) wages other costs of production are sticky, so higher prices lead to higher profit and higher output

Wages other costs of production are sticky, so higher prices lead to higher profit and higher output

When the aggregate price level increases, the purchasing power of many assets falls, causing a decrease in consumer spending. This is the ____________ effect , is a reason the aggregate demand curve slopes ____________. A) wealth; downward B) wealth; upward C) interest rate; downward D) interest rate; upward

Wealth; Downward

The largest component of GDP calculated using the income approach is: A) compensation of employees B) corporate profits C) proprietor's income D) taxes on production and imports

compensation of employees

A criticism of the National Bureau of Economic Research's business cycle dating committee is that it: A) dates peaks and troughs only after they occur B) makes premature judgements as to the turning points of the business cycle C) makes little use of the national income and product accounts D) does not update or revise data

dates peaks and troughs only after they occur

From 1999 to 2002, the Japanese inflation rates were, respectively, -0.3%, -0.6%, -0.7%, and -0.7%. During this time, the Japanese economy underwent: A) a rise in its price level. B) inflation. C) Deflation. D) hyperinflation

deflation (maybe)

The expenditures approach to calculating GDP sums consumer spending, gross private domestic investment, government spending and: A) exports minus imports B) exports C) imports D) imports minus exports

exports minus imports

When a recession gets under way: A) firms start to lay off workers to reduce costs B) consumer confidence rises because people expect an eventual recovery C) inflation always rises because the government prints more money D) inflation falls because the government reduces its budget deficit

firms start to lay off workers to reduce costs

A change in the Leading Economic Index is supposed to reflect: A) how the economy will behave in the near future B) how the economy behaved recently C) how the economy is behaving D) an average of how the economy has behaved over the most recent business cycle

how the economy will behave in the near future

Which of the following sequence is in the correct order according to the business cycle? A) peak; recession; trough; recovery B) peak; trough; recovery; recession C) peak; recession; recovery; trough D) peak; trough; recession; recovery

peak; recession; trough; recovery

GDP can be found either by adding up all of the __________ or all of the __________ in the economy. A) spending; income B) spending; taxes C) investment; income D) net interest payments; taxes

spending; income

Which is NOT a main use of the national income and product accounts? A) supporting the macroeconomic theory of the political party in power B) comparing U.S economic performance with that of other countries C) tracking the success of macroeconomic policy D) gauging the economy's position in the business cycle

supporting the macroeconomic theory of the political party in power

The leading Economic Index (LEI) is produced by: A)The federal Reserve bank of Chicago B) The National Bureau of Economic Research C) the U.S. Treasury D) the Conference Board

the Conference Board

When economists warn about crowding out effect, they are referring to: A) when banks run out of money to lend B) when prices set too low lead to large crowds C) When prices set too low lead to large crowds D) when government borrowing reduces private investment

when government borrowing reduces private investment

The National Bureau of Economic Research determines that a recession is over: A) when the economy is in a trough B) after one year of economic growth C) when the unemployment rate falls below 5% D) when the stock market reaches its prerecession level

when the economy is in a trough