Macro test 3

An increase in the price level results in a

Downward shift in the AE curve and a movement of along the A.D. curve

The marginal propensity to save is

Equal to the slope of the saving function

Which of the following leads to a right word shift in the short run Phillips curve

II

Suppose oil prices rise. The fed can, the quantity of money to, the unemployment rate back to its natural rate

Increase, lower

When the economy is that a full employment and investments increase in the long run the price level will end of potential GDP does not change in the long run real GDP will

Increase, not change

In the above figure if theLevel of real GDP is 15

Inventories are below the level planned by firms

When Japan experienced deflation in the 1990s and 2000s, Japan

Investment decreased so that it's capital stock grew more slowly

When aggregate planned expenditure is less than real GDP

Investment occurs

Economist believe that act help from fiscal and monetary policy is needed to ensure that they Konomi is operating at full employment

Key Nesian

Suppose that managers forecasted a large decline and expected sales and profits and so their confidence plumbers according to the, this forecast might start a business cycle

Key Nesian

An increase in the money wage rate ships the SAS curve and an increase in the monthly price of raw materials shifts the essay curve

Left word, left word

The quantity of real GDP demanded equals 18.2 when the price level is 90 if the price level rises to 95 the quantity of real GDP demanded equals

Less than 18.2

Economist believe that the economy is self-regulating and will be up for employment as long as monetary policy is not a Erratic

Monetarist

As disposable income increases there is a the saving function

Movement along

In the above figure, suppose that they Konomi is a point C. If the inflation rate is lower than expected

Neither the LRC nor the SRPC will shift

A decrease in the expected inflation rate leads to in the long run Phillips curve and in the short term Phillips curve

No shift, a downward shift

The slope of the aggregate expenditure curve equals the change in

Planned expenditure divided by the change in real GDP

You observe that unplanned inventories are increasing you predict that there will be a

Recession

During an end anticipated deflation, the real rate wage and employment

Rises, decreases

The curve labeled a in the figure above will shift rightward when

Technology increases

The short run aggregate supply curve shifts because of changes in all of the following except

The price level

Other things constant, the economies aggregate demand curve shows

The quantity of real GDP demanded decreases when the price level rises

Deflation can start with

A decrease in aggregate demand

When the price level rises, the long run aggregate supply curve

Does not shift

If the marginal propensity to consume is .8 and there are no income taxes or imports the multiplier for a change in autonomous expenditure equals

5

When disposable income increases to 7 to 7.5 consumption expenditure increases from 6.5 to 6.9 the MPS is equal to

.2

The data in the above table indicate that autonomous expenditure is

.3

Suppose that velocity of circulation increases by 2% and potential GDP grows by 2%. The trend inflation rate will equal zero if the quantity of money grows by

0

The data in the above table indicate that the economy will be in a short run macroeconomic equilibrium at a price level

119 and 111

If the slope of the 80 curves .6 the value of the multiplier is

2.5

The great depression in which real GDP fell and unemployment rose can be characterized as

A recessionary gap

Substitution effects can help explain the slope of the aggregate demand curve. One substitution effect refers to the

Affect on investment expenditures that result from change in interest rates produced by a change in the price level

In the above figure the economy is a point to a when changes occur if the new equilibrium has a price level of 100 and a real GDP of 17 then it must be the case that

Aggregate demand has decreased

Which of the following is not a potential start of demand pull inflation

An increase in taxes

In the short run a rise in the money wage rate leads to

An increase in the price level and a decrease in real GDP

If the consumption function lies below the 45° line then saving at these levels of disposable income will

Be positive

Moving along a short run aggregate supply curve, resource prices, the money weight wage, and potential GDP

Do not change, does not change, does not change

An increase in the price of a resource such as oil

Both III AND IV

Economists believe that economy a self regulating and always at full employment

Classical

Which of the following statements correctly describes the policy stance of macroeconomist

Classical macro economist believes that maintaining consistently low taxes will allow the economy to expand at an appropriate and rapid pace

In the figure above suppose the economy starts up pointy. The short run response to a decrease in the growth rate of the quantity of money in the monetarist business cycle theory move the economy to point

D

To end a deflation the government must

Decrease government expenditures

Real GDP equals 20 and aggregate planned expenditures 30 there is an unplanned in inventories of and real GDP

Decrease, 10, increase

An Economy currently has an inflationary gap. An increase in the money wage rate will the inflationary gap and the price level

Decrease, increase

Disposable income when

Decreases, taxes increase

An increase in the price level decreases planned expenditure because

The current price rises relative to future prices decreasing expenditure

The Cleveland federal reserve bank estimates that the expected inflation rate is 1.5% in 2013 the estimate means that

The long run and short run Phillips curve cross add an inflation rate of 1.5%

Which business cycle theory emphasizes that because of long-term wage agreements both expected and unexpected fluctuations in aggregate demand can change real GDP

The new key Nesian cycle theory

After an increase in autonomous spending in the long run a change in the price level

Will reduce the effect of the multiplier