Ch. 11 - end of chapter quiz

Which is NOT part of the index of leading economic indicators? a. manufacturers new orders for consumer goods/materials d. the m2 money supply

d. the m2 money supply

how does the economy move from a short run equilibrium to its long run equilibrium? a. flexible prices become sticky at their equilibrium levels b. shifts occur in the long run AS curve c. shifts occur in the short run AS curve d. shifts occur in the AD curve.

c. shifts occur in the short run AS curve

What is the expected result of a decrease in the velocity of money in the long run? a. the price level and output will both rise. b. the price level will remain constant and output will fall c. the price level will fall and output will not change d. the price level and output will both fall

c. the price level will fall and output will not change

what criterion does the NBER's business cycle dating committee use to determine when the economy goes into recession? a. two consecutive quarters of negative growth b. two consecutive quarters of growth at a rate lower than in the same quarters in the previous year c. a fall in real output of 3 percent or more in any given quarter d. a variety of data and its professional judgment

d. a variety of data and its professional judgment

From a macroeconomic theory perspective, what is unusual about the covid 19 recession? a. despite the enormity of the shock, policy response was fairly muted b. the recession was almost entirely a supply side phenomenon c. policymakers used both fiscal and monetary policy strategies to fight the recession d. there was a shift in the economy potential output.

d. there was a shift in the economy potential output.

when does the classical dichotomy NOT hold? a. when the fed maintains a steady money supply growth rate b. when the economy moves from peak to peak in the cycle c. when the goods market and ht money market are both in equilibrium. d. when not all prices are Flexible.

d. when not all prices are Flexible.

which is a valid description of the aggregate demand curve? a. it tells us the possible combinations of the price level and output for a given money supply. b. it tells us the possible combinations of the price level and output for a given interest rate. c. it tells us the short run equilibrium level of output d. it tells us the long run output of the economy

a. it tells us the possible combinations of the price level and output for a given money supply.

According to Okun's law, how would real GDP change if the unemployment rate rose by 2 percent? a. real gdp would fall by 1 percent b. real GDP would fall by 2 percent c. real gdp would fall by 6 percent

a. real gdp would fall by 1 percent

why do short Run and long run aggregate supply curves have different slopes? A. technological advances b. sticky prices c. inflation expectations d. stochastic shocks

b. sticky prices

For macroeconomists, what distinguishes the short run and the long run? a. the ability to change the factors of production employed b. a time period shorter or longer than two quarters c. whether prices are sticky or flexible d. a time period shorter or longer than the time from trough to trough in the business cycle.

c. whether prices are sticky or flexible