Exam 9: Macroeconomic Viewpoints and Models

-At an output level of $4.0 trillion, injections into the spending stream:

Keynesian and new Keynesian economics focus on the relationship between total output and:

Which of the following statements most accurately describes the current state of thinking about the macroeconomy?

According to the Keynesian approach, injections minus leakages equal:

Explain why classical and new classical economists think the economy can bring itself to a desirable level of output without government intervention.

According to the Keynesian approach, if the level of spending in an economy were $5.5 trillion and the level of output were $5.3 trillion:

According to the classical school of economics, if aggregate demand were to decrease and the economy were to experience some unemployment:

Classical economists advocate the view that a free market economy:

A primary conclusion of new classical economics is:

Which of the following is most likely to occur over the next 25 years?

Which of the following is NOT a position that would be taken by a Keynesian economist?

Why would you expect it to be more difficult to carry out macroeconomic policies in an open economy than in a closed economy?

According to the rational expectations concept:

According to new classical economics, aggregate demand in the economy increases as the level of prices decreases because of the:

The position that classical economics and Keynesian economics were both correct is advocated by the monetarist school.

The following figure illustrates the Keynesian model of equilibrium in the macroeconomy. -At a total output of zero:

The position that the economy will automatically tend to operate at full employment without government intervention is most closely associated with:

Suppose that, in a $10 trillion economy, households spend $6 trillion and $4 trillion is leaked from the economy. If the injections total less than $4 trillion,

In the U.S., the rate of inflation associated with any given rate of unemployment was typically lower in the late 1990s and early 2000s than it was in the late 1970s and early1980s.

If, using the Keynesian approach, injections into the spending stream were $1.2 trillion and leakages from the spending stream were $1.4 trillion: