Exam 9: Macroeconomic Viewpoints and Models

The classical economists held that the economy tends to operate at full employment.

The basis of the following figure based on the Keynesian approach. -For this economy, the equilibrium level of output is:

Which of the following statements about aggregate demand and supply in the new classical model is FALSE?

Which of the following schools of economic thought would favor active intervention into the macroeconomy through fiscal policy?

A typical monetarist would favor:

The economist that revolutionized economic thinking by focusing on the role of total spending in determining the level of output and employment was John Maynard Keynes.

A Keynesian economist would favor stabilizing the economy through:

In the Keynesian model, if total planned spending is _______ than the total output produced, employment and output will _______.

New Keynesian economics assumes:

The school of thought that holds that, in the macroeconomy, prices and wages are inflexible, or "sticky,"downward is:

-At an output level of $0, total injections are:

Using the Keynesian approach, an economy with $7.5 trillion in total spending and $8.0 trillion in total output is operating where:

In the new classical model, the natural rate hypothesis:

The monetarist school advocates:

The new Keynesian school argues that counting on decreases in prices and wages to remove unemployment may be unwise because:

If households anticipate that government intervention to stimulate demand will create inflation they will likely attempt to:

-At an output level of $400 billion:

Monetarism is the school of thought that favors:

If, using the Keynesian approach, total output in an economy was $5.25 trillion, total spending was $5.00 trillion, and injections into the spending stream were $3.25 trillion, leakages from the spending stream would equal:

According to Keynes, if the economy is in a recession, the government should: