Unit 2 and 3 MC
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
