ECON201 Homework 3Question 1 (1 point) The term ”full empl.docx

ECON201 Homework 3

Question 1 (1 point)

 The term ”full employment GDP” is synonymous with which of the following?
Question 1 options:

a) 
 potential GDP


b) 
 Keynesian zone


c) 
 aggregate GDP


d) 
 macroeconomic equilibrium


Question 2 (1 point)

 Whether the economy is in a recession is illustrated in the AD/AS model by how close the _____________________ is to the potential GDP line.
Question 2 options:

a) 
 AS and AD curve


b) 
 equilibrium


c) 
 AD curve


d) 
 AS curve


Question 3 (1 point)

42. The __________________ in an AD/AS diagram is most relevant to Keynes’s Law.
Question 3 options:

a) 
 AD curve


b) 
 AS curve


c) 
steep portion of the AS curve


d) 
 flat portion of the AS curve


Question 4 (1 point)

 Changes in the price level of the different components of aggregate demand are reflected in the AD/ASAD/AS macroeconomic model by a ________________________.
Question 4 options:

a) 
shorter distance to equilibrium point


b) 
longer distance to equilibrium point


c) 
 flatter top portion of AD curve


d) 
downward sloping AD curve


Question 5 (1 point)

 Why is productivity growth considered to be the most important factor in the AD/ASAD/AS model?
Question 5 options:

a) 
it shifts the AD curve in the short-term


b) 
it shifts the AS curve in the long-term


c) 
it shifts the AS curve in the short-term


d) 
 it shifts the AD curve in the long-term


Question 6 (1 point)

 _______________________ are economists who generally emphasize the importance of aggregate supply in determining the size of the macroeconomy over the _____________.
Question 6 options:

a) 
 Keynesian economists; long run


b) 
 Neoclassical economists; short run


c) 
 Keynesian economists; short run


d) 
Neoclassical economists; long run


Question 7 (1 point)

 Potential GDP in the U.S. will be unaffected by ____________________.
Question 7 options:

a) 
 the unemployment rate


b) 
 the amount of capital available


c) 
 government institutions


d) 
 technology


Question 8 (1 point)

 As the aggregate price level in an economy decreases,
Question 8 options:

a) 
 interest rates decrease.


b) 
 imports decrease.


c) 
consumer demand decreases.


d) 
investment decreases.


Question 9 (1 point)

The ____________ describes a situation where sufficient credit is available, but the economy experiences a reduction in consumption and investment.  
Question 9 options:

a) 
 interest rate effect


b) 
inflation rate effect


c) 
price effect


d) 
 wealth effect


Question 10 (1 point)

 The ____________________ in an AD/AS diagram is most relevant to Say’s Law.
Question 10 options:

a) 
 steep portion of the AS curve


b) 
 AD curve


c) 
 AS curve


d) 
 flat portion of the AS curve




a) 
an increase in economic growth


b) 
 an increase in input prices


c) 

less inflationary pressures



d) 
 a decrease in the natural unemployment rate










Question 12 (1 point)

 Refer to the graph above. A government creating economic policy ...

1. ECON201 Homework 3

Question 1 (1 point)

The term ”full employment GDP” is synonymous with which of
the following?
Question 1 options:

a)
potential GDP


b)
Keynesian zone


c)
aggregate GDP


d)
macroeconomic equilibrium


Question 2 (1 point)

Whether the economy is in a recession is illustrated in the
AD/AS model by how close the _____________________ is to
the potential GDP line.
Question 2 options:

a)
AS and AD curve

2. b)
equilibrium


c)
AD curve


d)
AS curve


Question 3 (1 point)

42. The __________________ in an AD/AS diagram is most
relevant to Keynes’s Law.
Question 3 options:

a)
AD curve


b)
AS curve


c)
steep portion of the AS curve


d)
flat portion of the AS curve


Question 4 (1 point)

3. Changes in the price level of the different components of
aggregate demand are reflected in the AD/ASAD/AS
macroeconomic model by a ________________________.
Question 4 options:

a)
shorter distance to equilibrium point


b)
longer distance to equilibrium point


c)
flatter top portion of AD curve


d)
downward sloping AD curve


Question 5 (1 point)

Why is productivity growth considered to be the most
important factor in the AD/ASAD/AS model?
Question 5 options:

a)
it shifts the AD curve in the short-term


b)
it shifts the AS curve in the long-term

4. c)
it shifts the AS curve in the short-term


d)
it shifts the AD curve in the long-term


Question 6 (1 point)

_______________________ are economists who generally
emphasize the importance of aggregate supply in determining
the size of the macroeconomy over the _____________.
Question 6 options:

a)
Keynesian economists; long run


b)
Neoclassical economists; short run


c)
Keynesian economists; short run


d)
Neoclassical economists; long run


Question 7 (1 point)

Potential GDP in the U.S. will be unaffected by
____________________.
Question 7 options:

5. a)
the unemployment rate


b)
the amount of capital available


c)
government institutions


d)
technology


Question 8 (1 point)

As the aggregate price level in an economy decreases,
Question 8 options:

a)
interest rates decrease.


b)
imports decrease.


c)
consumer demand decreases.


d)
investment decreases.

6. Question 9 (1 point)

The ____________ describes a situation where sufficient credit
is available, but the economy experiences a reduction in
consumption and investment.
Question 9 options:

a)
interest rate effect


b)
inflation rate effect


c)
price effect


d)
wealth effect


Question 10 (1 point)

The ____________________ in an AD/AS diagram is most
relevant to Say’s Law.
Question 10 options:

a)
steep portion of the AS curve


b)

7. AD curve


c)
AS curve


d)
flat portion of the AS curve




a)
an increase in economic growth


b)
an increase in input prices


c)

less inflationary pressures



d)
a decrease in the natural unemployment rate

8. Question 12 (1 point)

Refer to the graph above. A government creating economic
policy in these circumstances should be most concerned about:
Question 12 options:

unemployment but not inflation.

inflation but not unemployment.

inflation and unemployment.

neither inflation nor unemployment.

Question 13 (1 point)

The sum of all the income received for contributing resources
to GDP is called ___________________.
Question 13 options:

a)
marginal income (X)


b)
national revenue (Y)


c)
national income (Y)


d)

9. marginal revenue (X)


Question 14 (1 point)

According to the Keynesian framework, ________________ in
__________________ may cause inflation, but not a recession.
Question 14 options:

a)
decrease; interest rates


b)
an increase; domestic investment


c)
an increase; a major trading partner's economy


d)
a decrease; a major trading partner's export prices


Question 15 (1 point)


If a Phillips curve shows that unemployment is high and
inflation is low in the economy, then that economy:
Question 15 options:

a)
is producing at its potential GDP.

10. b)
is producing at its equilibrium point.


c)
is producing at a point where output is less than potential GDP.


d)
is producing at a point where output is more than potential
GDP.


Question 16 (1 point)

In a Keynesian cross diagram, what name is given to the
distance between an output level that is below potential GDP
and the level of potential GDP?
Question 16 options:

a)
national income (Y)


b)
expenditure-output


c)
inflationary gap


d)
recessionary gap

11. Question 17 (1 point)

Which of the following will cause the multiplier to be smaller
and cause changes in investor confidence to have a smaller
effect in an economy?
Question 17 options:

a)
decreased trade


b)
bigger leakages


c)
increased trade


d)
smaller leakages


Question 18 (1 point)

Aggregate demand is more likely to _________________ than
aggregate supply in the short run.
Question 18 options:

a)
increase slightly


b)
. decrease substantially

12. c)
shift substantially


d)
remain unchanged


Question 19 (1 point)

Keynesian economics focuses on explaining why recessions and
depressions occur, as well as offering a
______________________ for minimizing their effects.
Question 19 options:

a)
policy prescription


b)
set of menu costs


c)
pricing strategy


d)
macro-economic model


Question 20 (1 point)

Which of the following is a distinguishing characteristic of a
Keynesian cross diagram?

13. Question 20 options:

a)
45-degree line


b)
real GDP on the horizontal axis


c)
a flat line


d)
several different Phillips curves


Question 21 (1 point)

35. Which of the following data would be analyzed to determine
whether any shift in the MPI has occurred over the course of the
past 5 year period?
Question 21 options:

a)
interest rates


b)
exchange rates


c)
MPS

14. d)
foreign income


Question 22 (1 point)

According to the _____________________ argument, a market-
oriented economy has no obvious way to implement a plan of
systematic wage reductions.
Question 22 options:

a)
sticky wage


b)
sticky wage and price


c)
coordination


d)
Keynesian


Question 23 (1 point)

Refer to the graph shown below. At point B:

15. Question 23 options:

a)
economic growth it low or even negative.


b)
unemployment is very low.


c)
output is expanding.


d)
businesses may raise prices.


Question 24 (1 point)


When the economy is in a recession, the government will want
to increase output. If the multiplier equals 2.5 and the
government increases spending by 200, how much will output
increase by?
Question 24 options:

a)
500


b)
900

16. c)
100


d)
300


Question 25 (1 point)

Suppose that out of the original 100 increase in government
spending, 33 will be recycled back into purchases of
domestically produced goods and services in the second round
and 10.89 is spent in the third round. Following this multiplier
effect, what value would be recycled in the fourth round of this
cycle?
Question 25 options:

a)
9.89


b)
3.37


c)
5.23


d)
3.59