chap 5 macro

Identify the most likely impact of a decrease in the wealth of consumers in an economy, other things remaining constant.

A leftward shift of the aggregate demand curve

Which of the following would indicate the beginning of an expansionary phase in an economy?

An improvement in consumer confidence

Which of the following is a likely impact of an increase in the price level in an economy on the aggregate supply in the economy?

An increase in the quantity of real GDP supplied

The figure given below shows the aggregate demand and supply curves for the U.S. According to the figure, from the beginning of period 1 to the end of period 2, _____.

. real GDP decreased and then increased

Which of the following would indicate the beginning of a recessionary phase in an economy?

Businesses slowing down

The following table shows an aggregate demand schedule and an aggregate supply schedule. Which of the following is true?

Equilibrium output is $600, and equilibrium price level is 75.

Which of the following is a likely consequence of an increase in the price level in an economy, other things constant?

Government demanding less military hardware

Which of these describes the real gross domestic product?

Gross domestic product that has been adjusted for changes in the price level

identify the correct statement.

If the price level increases, we feel poorer and buy less.

Which of the following factors can partly explain the long-term growth in production in the U.S. economy?

Improvements in technology

Which of the following statements regarding the gross domestic product is true?

It is useful in comparing the overall performances of different economies at the same time.

Which of the following signifies the role of money in an economy?

It serves as a medium of exchange in the economy.

Which of the following is a central argument of Keynes's General Theory?

Modern industrial economies do not tend automatically toward full employment rates of output.

Identify an example of a flow variable.

The amount of sales tax collected per year

Which of the following is most likely to happen if the aggregate demand curve for an economy (which was initially in equilibrium) shifts to the left, aggregate supply remaining unchanged?

The equilibrium real GDP will decrease.

Which of the following variables is measured only at a particular point in time and not over different time periods?

The federal government's debt

Macroeconomics is a branch of economics that studies:

The overall performance of an economy

Which of the following is true of economic fluctuations?

They can be experienced by the world economy as well as by a single nation.

Which of the following is true of leading economic indicators?

They foreshadow turning points in the business cycle.

When economists refer to an economy's price level, they indicate:

a composite measure of prices of all goods and services.

In terms of the aggregate demand and aggregate supply framework, the Great Depression can be viewed as a:

a leftward shift of the aggregate demand curve.

The term stagflation refers to:

an increase in the price level accompanied by decreases in real output and employment.

The aggregate demand curve reflects:

an inverse relationship between the price level in an economy and real GDP demanded, other things constant.

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to

an upward movement along the aggregate demand curve

Economic fluctuations or business cycles:

are fluctuations in the level of economic activity relative to a long-term growth trend.

The demand for _____ is most severely affected by a recession.

automobiles

The Keynesian approach to economic policy is also known as:

demand-side economics.

One explanation for the slope of the aggregate demand curve is that:

domestic goods become more expensive relative to foreign goods when prices rise, reducing exports.

A recession is best defined as a period during which:

employment, output, and income decrease.

According to Keynes, in order to get the economy out of a recession, the government should:

follow an expansionary fiscal policy.

The market value of all final goods and services produced in a nation during a particular period is called the:

gross domestic product.

The concept of "invisible hand" introduced by Adam Smith explains:

how people, acting out of self-interest, unintentionally promote the general good.

The long-term growth in production in an economy can be partially explained by:

improvements in the rules of the game that facilitate production and exchange.

For a given aggregate supply curve, an increase in aggregate demand will:

increase real GDP.

. According to John Maynard Keynes' General Theory of Employment, Interest, and Money, the government should _____ in order to get the economy out of a depression.

increase spending

If the price level in the U.S. decreases, other things constant, aggregate output demanded:

increases because U.S. products become cheaper relative to foreign products.

The economic policy based on the incorrect theory that a nation's economic objective should be to accumulate precious metals in the public treasury is called _____.

mercantilism

If all firms expect greater demand for their products or services, they will hire _____ resources like labor and capital and the economy will experience _____.

more; growth

Which of these is a coincident economic indicator?

personal income

Macroeconomic equilibrium is best described as a situation in which:

quantity supplied equals quantity demanded at a unique price level.

The value of a country's final goods and services after adjusting for changes due to inflation is called its _____.

real GDP

An increase in government spending, other things constant, will cause a:

rightward shift of the aggregate demand curve.

A key difference between recessions and depressions is that recessions are:

shorter and less severe than depressions.

A _____ is an amount measured at a particular point in time.

stock variable

The aggregate supply curve represents:

the quantity of aggregate output that producers are willing and able to supply at each possible price level, other things constant.