Exam 6: B: an Introduction to Macroeconomics

Assume that the demand for goods and services falls across the entire economy and for an extended period of time.If the prices are inflexible, the unintended increase in business inventories would force:

When we say "Prices of many goods and services are inflexible in the short-run" it means:

Knowing that in the real world, the demand for goods and services could change unexpectedly, firms would attempt to deal with it by:

One major difference between the short-run and long-run macroeconomic analysis is that:

The decisions about savings and investments are complicated because:

In economics, the term "investment" includes:

Which of the following is not an economic investment?

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

Savings are generated when current consumption is less than current output.

When consumption is less than output what is this called?

Modern economic growth refers to the idea of experiencing:

The higher is the current level of saving:

Which of the following have the most flexible prices?

Refer to the diagram given below.The diagram has two panels: (a) and (b). Panel (a) represents the demand for and the supply of a brand of automobile (Turbo car) for Fancy Auto, a car manufacturing company.Assume that DL represents the demand for Turbo cars when demand is low, DM represents the demand for Turbo cars when demand is medium, and DH represents the demand for Turbo cars when demand is high.If Fancy Auto's optimal output level is 900 cars per week and the price of Turbo cars is flexible, Fancy Auto:

If the unexpected short-run fluctuations in demand begin to look permanent:

Because prices change too slowly in the short-run and as a result, they do not quickly equalize the quantity demanded and quantity supplied of goods and services, the short-run response of the economy to a demand shock is through:

Real GDP and nominal GDP differ because real GDP:

Economic growth is defined as:

If prices are flexible, no matter what demand turns out to be, firms can continue selling their optimal output.

The financial institutions play an important role in transferring the savings of the individuals to the investments by businesses.Which of the following correctly states this transfer?