Ch 24

As the aggregate price level in an economy decreases a.investment decreases b.consumer demand decreases c.interest rates decrease d.imports decrease

a

_____ results when an economy experience high unemployment and high inflation at the same time a.stagflation b.deflation c.reflation d.recession

a

In macroeconomics, _____ denotes the relationship between the total quantity of goods and services and the price level for output a.macroeconomic equilibrium b.aggregate supply c.aggregate demand d.potential gdp

b

The maximum quantity that an economy can produce, given its existing levels of labor, physical capital, technology, and institutions, is called: a.real GDP b.potential GDP c.aggregate supply d.aggregate demand

b

When the economy of a country is operating closes to its fullest capacity a.the unemployment rate is greater than the natural rate of unemployment b.cyclical unemployment is close to zero c.unemployment is close to zero d.the unemployment rate is less than the natural rate of unemployment

b

Potential GDP in the U.S. will be unaffected by ____________________. A. technology B. the amount of capital available C. the unemployment rate D. government institutions

c

What erm is used to describe the maximum quantity that an economy can produce, in the context of its existing inputs, market and legal institutions? a.GDP deflator b. AS curve c.potential GDP d.aggregate supply

c

_______________ happens when the economy is producing at its potential and unemployment is at the natural rate of unemployment a.the foreign price effect b.stagflation c.full employment GDP d.the interest rate effect

c

If the price level of what firms produce is rising across an economy, but the costs of production are constant, then: a.the maximum GDP will be exceeded b.increase in quantity produced won't be large c.a majority of industries will start running into limits d.higher profits will induce expanded production

d

In an AD/AS model a.GDP deflator always slopes upwards b.the potential GDP always always sloped downwards c.the CPI is shown on the vertical axis d.the GDP is shown on the horizontal axis

d

The term "full employment GDP" is synonymous with which of the following? a.aggregate GDP b.Keynesian zone c.macroeconomic equilibrium d.potential gdp

d