Macroeconomics Exam 3
As of March 2019, the supply of money (M1) in the United States was about
$3,760 billion.
Which of the following is a true statement?
Fiscal policy swung from contractionary to expansionary in 2002.
If the economy is in equilibrium at $400 billion of GDP and the full-employment GDP is $500 billion,
GDP will remain at $400 billion unless aggregate expenditures change.
In the United States from 1929 to 1933, real GDP _____________ and the unemployment rate ________________.
declined by 27 percent; rose to 25 percent.
Which of the following is an example of built-in stability? As real GDP decreases, income tax revenues
decrease and transfer payments increase
When the excess capacity of business expands unintentionally, aggregate...
demand will decrease.
The American Recovery and Reinvestment Act of 2009 is a clear example of
discretionary fiscal policy that made the cyclically adjusted budget become more negative.
In the aggregate expenditures model, it is assumed that investment...
does not change when real GDP changes.
immediate-short-run AS curve is
horizontal line
An increase in expected future income will...
increase aggregate demand.
In a recessionary expenditure gap, the equilibrium level of real GDP is...
less than full-employment GDP
The real-balances effect on aggregate demand suggests that a...
lower price level will increase the real value of many financial assets and therefore cause an increase in spending.
Most economists believe that fiscal policy is
not as good as monetary policy for month-to-month stabilization.
The most likely way the public debt burdens future generations, if at all, is by
reducing the current level of investment.
One of the most important views expressed by classical macroeconomists was that...
supply creates its own demand.
The financing of a government deficit increases interest rates and, as a result, reduces investment spending. This statement describes
the crowding-out effect
short-run AS curve is
upward sloping
long-run AS curve is
vertical