Question 1

Keynes was not concerned with:

Accepted Answer

A) problems of inflation but his theory helps to fight supply-push inflation. 
B) problems of interest rates but his theory helps to fight deflation. 
C) problems of investments but his theory helps to fight demand-pull inflation. 
D) problems of inflation but his theory helps to fight demand-pull inflation. 
A) problems of inflation but his theory helps to fight supply-push inflation. 
B) problems of interest rates but his theory helps to fight deflation. 
C) problems of investments but his theory helps to fight demand-pull inflation. 
D) problems of inflation but his theory helps to fight demand-pull inflation.

Question 2

If an economy is operating along the Keynesian section of the aggregate supply curve,then an increase in aggregate demand will result in:

Accepted Answer

A) an increase in inflation and an increase in real GDP. 
B) no change in the price level and a decrease in unemployment. 
C) a decrease in the price level and a decrease in unemployment. 
D) no change in the price level and an increase in unemployment. 
E) no change in the price level, but the effect on real GDP is indeterminate. 
A) an increase in inflation and an increase in real GDP. 
B) no change in the price level and a decrease in unemployment. 
C) a decrease in the price level and a decrease in unemployment. 
D) no change in the price level and an increase in unemployment. 
E) no change in the price level, but the effect on real GDP is indeterminate.

Question 3

If your MPS is 0.60 that means that:

Accepted Answer

A) for every dollar increase in your disposable income, consumption will decrease by 60 cents. 
B) for every dollar decrease in your disposable income, consumption will increase by 60 cents. 
C) for every dollar increase in your disposable income, consumption will increase by 60 cents. 
D) for every dollar increase in your disposable income, consumption will remain unchanged. 
A) for every dollar increase in your disposable income, consumption will decrease by 60 cents. 
B) for every dollar decrease in your disposable income, consumption will increase by 60 cents. 
C) for every dollar increase in your disposable income, consumption will increase by 60 cents. 
D) for every dollar increase in your disposable income, consumption will remain unchanged.

Question 4

In the upward-sloping segment of the aggregate supply curve:

Accepted Answer

A) increases in output are linked to decreases in the price level. 
B) increasing prices drag down resource costs. 
C) producers can hire more workers without having to raise the wage rate. 
D) the economy can increase aggregate supply without prices going up. 
E) firms are willing to pay higher wages to get more labour. 
A) increases in output are linked to decreases in the price level. 
B) increasing prices drag down resource costs. 
C) producers can hire more workers without having to raise the wage rate. 
D) the economy can increase aggregate supply without prices going up. 
E) firms are willing to pay higher wages to get more labour.

Question 5

A contraction in an aggregate demand can cause:

Accepted Answer

A) an increase in employment 
B) a decrease in unemployment. 
C) an increase in real GDP. 
D) a recession. 
A) an increase in employment 
B) a decrease in unemployment. 
C) an increase in real GDP. 
D) a recession.

Question 6

Exhibit 14-1 Aggregate supply curve
  
-In Exhibit 14-1,there are plenty of idle resources and no upward pressure on prices in:

Accepted Answer

A) the segment labeled ab. 
B) the segment labeled bc. 
C) the segment labeled cd. 
D) both segment bc and segment cd. 
E) the entire curve. 
A) the segment labeled ab. 
B) the segment labeled bc. 
C) the segment labeled cd. 
D) both segment bc and segment cd. 
E) the entire curve.

Question 7

Keynes placed great primacy on the:

Accepted Answer

A) production function. 
B) supply side of the economy. 
C) demand side of the economy. 
D) delivery of inputs to producer. 
A) production function. 
B) supply side of the economy. 
C) demand side of the economy. 
D) delivery of inputs to producer.

Question 8

Advances in technology will shift the aggregate:

Accepted Answer

A) demand curve rightward. 
B) supply curve rightward. 
C) demand curve leftward. 
D) supply curve leftward. 
A) demand curve rightward. 
B) supply curve rightward. 
C) demand curve leftward. 
D) supply curve leftward.

Question 9

Exhibit 14-2 Aggregate demand and supply
  
-In Exhibit 14-2,if aggregate demand shifts from AD₁ to AD₃,real GDP will:

Accepted Answer

A) increase from $3 to $4 and the price level will increase from 100 to 140. 
B) increase from $3 to $7 and the price level will increase from 100 to 140. 
C) increase from $3 to $4 and the price level does not change. 
D) increase from $3 to $7 and the price level will increase from 100 to 120. 
E) not change and the price level will increase from 100 to 140. 
A) increase from $3 to $4 and the price level will increase from 100 to 140. 
B) increase from $3 to $7 and the price level will increase from 100 to 140. 
C) increase from $3 to $4 and the price level does not change. 
D) increase from $3 to $7 and the price level will increase from 100 to 120. 
E) not change and the price level will increase from 100 to 140.

Question 10

A leftward shift in the aggregate demand curve can be caused by:

Accepted Answer

A) a decrease in the price level. 
B) an increase in business investment spending. 
C) a decrease in business investment spending 
D) an increase in consumer optimism about the future. 
A) a decrease in the price level. 
B) an increase in business investment spending. 
C) a decrease in business investment spending 
D) an increase in consumer optimism about the future.

Question 11

In the aggregate demand-output model,if an economy operates below equilibrium GDP,there will be:

Accepted Answer

A) unplanned inventory depletion. 
B) unplanned inventory accumulated. 
C) a decrease in GDP. 
D) a decrease in employment. 
A) unplanned inventory depletion. 
B) unplanned inventory accumulated. 
C) a decrease in GDP. 
D) a decrease in employment.

Question 12

Keynes argued that prices and wages were likely to be inflexible during a recession because:

Accepted Answer

A) unemployment would be high and firms would have little spare capacity. 
B) unemployment would be low and firms would have little spare capacity. 
C) unemployment would be high and firms would have substantial spare capacity. 
D) unemployment would be low and firms would have substantial spare capacity. 
E) unemployment and inflation would be high. 
A) unemployment would be high and firms would have little spare capacity. 
B) unemployment would be low and firms would have little spare capacity. 
C) unemployment would be high and firms would have substantial spare capacity. 
D) unemployment would be low and firms would have substantial spare capacity. 
E) unemployment and inflation would be high.

Question 13

What is the title of the John Maynard Keynes's book published in 1936 that challenged the classical self-correction economic theory?

Accepted Answer

A) In the Long Run, We are Dead. 
B) Classical Economics Revised. 
C) General Theory of Employment, Interest and Money. 
D) A Keynesian Approach to Economic Policy. 
A) In the Long Run, We are Dead. 
B) Classical Economics Revised. 
C) General Theory of Employment, Interest and Money. 
D) A Keynesian Approach to Economic Policy.

Question 14

The fraction of each added dollar of disposable income that is used for consumption is called the:

Accepted Answer

A) average propensity to consume (AP
C) . 
B) autonomous consumption rate (ACR). 
C) marginal consumption propensity (MCP). 
D) marginal propensity to consume (MP
C) . 
E) total propensity to consume (TP
C) . 
A) average propensity to consume (AP
C) . 
B) autonomous consumption rate (ACR). 
C) marginal consumption propensity (MCP). 
D) marginal propensity to consume (MP
C) . 
E) total propensity to consume (TP
C) .

Question 15

As the marginal propensity to consume (MPC)decreases,the spending multiplier:

Accepted Answer

A) increases. 
B) decreases. 
C) remains constant. 
D) becomes undefinable. 
E) cannot be estimated. 
A) increases. 
B) decreases. 
C) remains constant. 
D) becomes undefinable. 
E) cannot be estimated.

Question 16

According to Keynes,what is the most important determinant of households' spending on goods and services?

Accepted Answer

A) Price levels. 
B) Interest rates. 
C) Autonomous consumption. 
D) Disposable income. 
A) Price levels. 
B) Interest rates. 
C) Autonomous consumption. 
D) Disposable income.

Question 17

Exhibit 14-2 Aggregate demand and supply
  
-In Exhibit 14-2,if aggregate demand shifts from AD₅ to AD₄,real GDP will:

Accepted Answer

A) not change and the price level will fall from 170 to 100. 
B) not change and the price level will fall from 140 to 100. 
C) fall from $8 to $6 and the price level will not change. 
D) fall from $8 to $6 and the price level will fall from 140 to 120. 
E) not change and the price level will fall from 170 to 140. 
A) not change and the price level will fall from 170 to 100. 
B) not change and the price level will fall from 140 to 100. 
C) fall from $8 to $6 and the price level will not change. 
D) fall from $8 to $6 and the price level will fall from 140 to 120. 
E) not change and the price level will fall from 170 to 140.

Question 18

Suppose workers become pessimistic about their future employment,which causes them to save more and spend less.If the economy is on the intermediate range of the aggregate supply curve,then:

Accepted Answer

A) both real GDP and the price level will fall. 
B) real GDP will fall and the price level will rise. 
C) real GDP will rise and the price level will fall. 
D) both real GDP and the price level will rise. 
A) both real GDP and the price level will fall. 
B) real GDP will fall and the price level will rise. 
C) real GDP will rise and the price level will fall. 
D) both real GDP and the price level will rise.

Question 19

Net exports will rise if:

Accepted Answer

A) the currency depreciates. 
B) foreign income falls. 
C) domestic income increases. 
D) the terms of trade remain constant. 
A) the currency depreciates. 
B) foreign income falls. 
C) domestic income increases. 
D) the terms of trade remain constant.

Question 20

The relationship between consumer expenditures and disposable income is the:

Accepted Answer

A) savings function. 
B) tax rate function. 
C) disposable income function. 
D) consumption function. 
A) savings function. 
B) tax rate function. 
C) disposable income function. 
D) consumption function.

Keynes was not concerned with:

If an economy is operating along the Keynesian section of the aggregate supply curve,then an increase in aggregate demand will result in:

If your MPS is 0.60 that means that:

In the upward-sloping segment of the aggregate supply curve:

A contraction in an aggregate demand can cause:

Exhibit 14-1 Aggregate supply curve -In Exhibit 14-1,there are plenty of idle resources and no upward pressure on prices in:

Keynes placed great primacy on the:

Advances in technology will shift the aggregate:

Exhibit 14-2 Aggregate demand and supply -In Exhibit 14-2,if aggregate demand shifts from AD₁ to AD₃,real GDP will:

A leftward shift in the aggregate demand curve can be caused by:

In the aggregate demand-output model,if an economy operates below equilibrium GDP,there will be:

Keynes argued that prices and wages were likely to be inflexible during a recession because:

What is the title of the John Maynard Keynes's book published in 1936 that challenged the classical self-correction economic theory?

The fraction of each added dollar of disposable income that is used for consumption is called the:

As the marginal propensity to consume (MPC)decreases,the spending multiplier:

According to Keynes,what is the most important determinant of households' spending on goods and services?

Exhibit 14-2 Aggregate demand and supply -In Exhibit 14-2,if aggregate demand shifts from AD₅ to AD₄,real GDP will:

Suppose workers become pessimistic about their future employment,which causes them to save more and spend less.If the economy is on the intermediate range of the aggregate supply curve,then:

Net exports will rise if:

The relationship between consumer expenditures and disposable income is the:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

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Exam 14: A simple model of the macro economy

Keynes was not concerned with:

If an economy is operating along the Keynesian section of the aggregate supply curve,then an increase in aggregate demand will result in:

If your MPS is 0.60 that means that:

In the upward-sloping segment of the aggregate supply curve:

A contraction in an aggregate demand can cause:

Exhibit 14-1 Aggregate supply curve -In Exhibit 14-1,there are plenty of idle resources and no upward pressure on prices in:

Keynes placed great primacy on the:

Advances in technology will shift the aggregate:

Exhibit 14-2 Aggregate demand and supply -In Exhibit 14-2,if aggregate demand shifts from AD₁ to AD₃,real GDP will:

A leftward shift in the aggregate demand curve can be caused by:

In the aggregate demand-output model,if an economy operates below equilibrium GDP,there will be:

Keynes argued that prices and wages were likely to be inflexible during a recession because:

What is the title of the John Maynard Keynes's book published in 1936 that challenged the classical self-correction economic theory?

The fraction of each added dollar of disposable income that is used for consumption is called the:

As the marginal propensity to consume (MPC)decreases,the spending multiplier:

According to Keynes,what is the most important determinant of households' spending on goods and services?

Exhibit 14-2 Aggregate demand and supply -In Exhibit 14-2,if aggregate demand shifts from AD₅ to AD₄,real GDP will:

Suppose workers become pessimistic about their future employment,which causes them to save more and spend less.If the economy is on the intermediate range of the aggregate supply curve,then:

Net exports will rise if:

The relationship between consumer expenditures and disposable income is the:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters