Economics Unit 6: Macroeconomics

A variable that tends to move in advance of aggregate economic activity is called

A leading variable

Which of the following is defined as the total quantity of goods and services in the entire economy that al citizens will want to purchase at any single time?

Aggregate Demand

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves is vertical?

Aggregate Supply Curve

When the government spends more the initial effect is that

Aggregate demand shifts right

The low point in the business cycle is referred to as the

Aggregate economic activity

When aggregate economic activity is increasing, the economy is said to be in

An Expansion

Leading economic indicators are

Statistics that precede economic events

Which model of short run aggregate supply involves?

Sticky-Price

Whihc of the following models for the upward sloping aggregate supply curve relies on the price of goods?

Sticky-Price

National income is defined as

Total value . of a country's final output of all . new goods and services produced that firms are willing to provide

What is the slope of the short-run aggregate supply curve

Upward

Which of the explanations for the upward sloping short-run aggregate supply curve is best?

Wages and prices are sticky in the short run but flexible in the long run

What is one way that the long-run aggreggate supply curve can shift?

When factors of production change in quantity

What is the real GDP, In 2007, using 2002 as the base year?

$6,360 (multiply Price of 2002 and quantity of 2007)

A variable that tends to move at the same time as aggregate economic activity is called

A coincident variable

Which of the following shits aggregate demand to the right?

A drop in "oil" price

Which curve usually shifts in the AS-AD model

AD shifts to Right

Which of the following shifts short-run aggregate supply right?

An increase in immigration from abroad

which of the following is a possible result of a right shift of the aggregate supply curve?

Consumption, investment, government

The NBER's business cycle committee picks recession dates by looking at the four most important of which are industrial production, manufacturing and trade sales and non-firm employment and real personal income. These variables are known as

Coincident Indicator

Investment, as defined by economists, would include the purchase of a..

Computer by an accounting Firm

In the long run a reducrion in labor supply would cause output to, and aggregate price level to

Decrease, decrease

With inflation, the purchasing power of money

Decreases the amount of goods and services you would be able to buy

Net domestic product (NDP) is a better measure of the economy's productivity than GDP because it accounts for

Depreciation

Wha is the slope of the aggregate demand curve?

Downward

When an aggregate demand curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, if the money supply is decreased, then the aggregate demand curve will shift

Downward and to the left

Macroeconomics seeks to understand

Economic Growth, business cycles, an inflation

What do you call the intersection of the long-run aggregate supply curve and the aggregate demand curve?

Equilibrium Price-Level

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis and that U.S net exports would

Fall, making aggregate demand shift left

Most economists believe that prices are

Flexible in the long run but are sticky in the short run

The aggregate supply curve (short run)

Graphical rep. that shows positive relationship between aggregate price level and quantity of aggregate output

If the short-run aggregate supply curve is horizontal, an increase in union aggressiveness that pushes wages and prices up will result in... prices and... output in the short run

Higher, lower

Which of the following is a true statement about real and nominal GDP

If real GDP increases from one year to the next we know that the production of goods and services has risen

Which of the following shifts aggregate demand to the left?

If the dollar appreciates because of speculation or government policy

In the above diagram, a shift from AS1 to AS3 might be caused by a(n)

Increase in the prices of imported resources

The misperceptions theory of the short-run aggregate supply curve says that if the price level increases more than people expect firms believe that the relative price of what they produce has

Increased, so they can increase production

When taxes decrease, consumption

Increases

Which of the following is NOT directly counted in GDP?

Intermediate Goods

When a long-term aggregate supply curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis this curve

Is Vertical

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis the long-run aggregate supply curve

Is vertical

A varaible that tends to move later than aggregate economic activity is called

Lagging Variable

Consumption would decrease and aggregate demand would shift

Left

Which of the following curvs does not appear in the AS-AD model?

Long run aggregate demand

Which of the following choices is defined as a representative group of goods and services used to compile the consumer price index?

Market Basket

The purchase by a foreign household of a CD produced in the United States is included in U.S

Net Exports

According to the short run aggregate supply curve, what happens as the price level rises?

Output increases

Refer to the diagram, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. A recession is depicted by

Panel B only

The four major components of expenditures are

Personal Consumption expenditures, Investments, Net Exports, and Government Expenditure.

Total Income that individuals receive before personal taxes are paid is called

Personal Income (PI)

Aggregate supply is the relationship between the quantity of goods and serviced supplied and the

Price level

If the long- run aggregate supply curve is vertical, then changes in aggregate demand affect

Prices but not level of output

The availability of raw materials is a example of which of the following forces affecting the economy?

Product

Which of the following describes the United States economy in the 1990s

Prolonged Growth

What does the aggregate supply curve show

Relationship between price levels and quantity of output that firms are willing to provide

In the long run, an increase is productivity would cause output to... and the aggregate price level to...

Rise, Fall

Which of the following shifts aggregate demand to the right?

The Federal Reserve buys bonds

A decrease in government spending on the park system would cause

The aggregate demand curve to shift to the left

What information is needed in order to maximize the usefulness of the aggregate demand curve?

The aggregate supply curve

A decline the stock market, which makes consumers poorer, would cause

The aggressive demand curve to shift to the left

The aggregate supply curve is vertical in

The economy's supply of goods and services depends on its supplies of capital labor and natural resources

Personal Income is defined as

The income that households and non-corporate businesses receive

The consumer price index compares

The price of a fixed basket goods and services to the price of the basket in the base year

The aggregate supply curve is upward sloping, rather than vertical in

The short-run but not the long run

What does aggregate demand represent?

Total quantity of all goods and services demanded output through the relationship of aggregate demand and aggregate supply

When GDP growth declines investment spending typically ... and consumption spending typically...

decreases, decreases