Exam 9: Introduction to the Macroeconomy

What are the strategies that ?rms can use to stabilize demand and pro?ts in a recession?

Assume that wages in an economy do not fully adjust to inflation. Other things constant, with an increase in inflation, _____.

Household savings is an example of a leakage in the circular flow of income.

Leakages in the circular flow of income represent additional spending on goods and services that does not come from the income earned by households.

In equilibrium, savings equal investments.

The equilibrium price level in the economy is determined by the intersection of the aggregate demand and aggregate supply curve.

In the circular flow model, the factors of production are owned by _____.

How does the pace at which wages adjust to in?ation determine the shape of the aggregate supply curve in the short run and in the long run?

When prices start falling in the economy and margins shrink, this implies that:

Which of the following entities cause an injection in the circular flow of income in the form of capital assets?

Which of the following will occur if there is an increase in investment in the economy?

There is a negative relationship between aggregate demand and inflation.

In the early 2010s, the UK economy was characterized by weak growth in GDP and high inflation and unemployment levels.

Other things constant, an increase in imports will shift the aggregate demand curve to the right.

Which of the following would cause inflation to fall but national output to rise?

Which of the following correctly de?nes in?ation?

Leakages from the circular ?ow constitute:

As an economy moves into recession, the revenues from inferior goods tend to increase.

In the circular flow of income, the purchase of a hospital by the government represents _____.

The level of unemployment in an economy is measured as: