econ help
In general economic research suggest that economies tend to
All of the above
a tax cut is associated with which of the following
Expansionary Fiscal Policy
The cyclically adjusted deficit as a percentage of GDP is 3 % in yr 1. This deficit becomes a surplus of 2 percent of GDP in year 2. from yr 1 to 2
Fiscal Policy turned more contractionary
when the economy is at equilibrium GDP level, all of the following will occur but
Inventories will be at zero
Which factor explains the high variability of investment
The durability of capital goods
If the cyclically- adjusted budget deficit and the actual budget deficit were the same, what could we assume
The economy is at full employment
In the how of income and spending, saving and investment are respectively
a leakage and an injection
Say's law in classical economics suggest that, over a period of time
aggregate spending total output and income
Would cause the multiplier consumer income to increase
all of the above (increase in MPC, decrease in MPS)
Which of the following will shift A1 to A3
an increase in input price
Relative to the US dollar, ________ over these months making it _____ for businesses to sell but also making it ______ for US consumers to buy goods imported from GB
appreciated, harder, easier
The long run aggregate supply analysis assumes that
both input and product prices are variable
Without a change in discretionary fiscal policy , if the economy goes into a rescission then the
cyclically- adjusted deficit would stay the same while the actual deficit increases
Given the expected rate of return on all possible investments opportunities in the community , a ______ in real interest rate will tend to _______ the level of overall investment
decrease, increase
An economy characterized by high unemployment is likely to be
experiencing a recessionary expenditure gap
The investment demand curve will shift to the left as a result of
general business- pessimism about future economic conditions
The immediate-short run aggregate supply curve is _____, while the short-run aggregate supply curve is _______
horizontal, upward sloping
net exports are negative
imports exceed exports
The American Recovery and Reinvestment Act of 2007 included mostly
increase in government spending and decrease in taxes
In the Great Rescission of 07-09 the aggregate expenditures schedule in the US economy dropped, due to a large part of what
investment expenditures
The "rockets and feathers" phenomenon that we discussed in class references to what economic tendency
prices in general tend to rise faster than they fall
constant, if domestic consumers purchase fewer foreign goods and more domestic goods, at each level the GDP in the short run will
rise
Assume that MPS in an economy went from .25 to .15. The multiplier effect associated w/ initial changes in consumer spending will
rise to a higher value
If GDP exceeds aggregate expenditures
saving will exceed planned investment
one major flay with says law is
say's lawigher savings
If business feel more optimistic about the state of the economy then this change is likely to
shift the investment demand curve to the right
The short run version of aggregate supply assumes
that product prices are flexible but resource prices are fixed
if the aggregate consumption in an economy was always equal to the disposable income then
the income consumption graph would be the same as the 45% reference line
An investment demand curve shows the varying amount of investment that would be undertaken at various levels of
the real investment rate
If the real interest rate increases
there would be a movement upward along the investment demand curve
best example of an automatic stabilizer for the economy
unemployment benefits paid to laid off workers
The long run aggregate supply curve is
vertical
The upward slope of the short- run aggregate supply curve is based on the assumption that
wages and other resource prices do not respond to price level changes
The cyclically-adjusted budget deficit in an economy is zero. If the economy goes through a recession then the actual gov budget
will be in a deficit
The marginal propensity to save is
.25
The marginal propensity to consume is
.75
suppose that an economy produces 2400 units of output, employing 60 units of the input , and the price is $30 per unit the per unit cost is:
.75
If the MPS if .1 then the multiplier will be
10 (multiplier= 1/mps)
What year did the US federal government experience a surplus
2001
The multiplier associated with this autonomous increase in investment is
4.0