Exam 10: Classical and Keynesian Macro Analyses

Which of the following will cause an increase in aggregate supply?

Demand-pull inflation occurs

Individuals will increase their saving as

John Maynard Keynes developed his economic theories in the

In the above figure, the economy would most likely move from AD₁ to AD₂ because of

A short-lived increase in oil prices caused by destruction of oil-producing and oil-refining facilities by a large hurricane will

In the Keynesian model, an aggregate demand shock

Real GDP is ________ determined in the classical model and ________ determined in the Keynesian model.

What is the shape of the modern short-run aggregate supply (SRAS)curve? Why?

Which of the following is NOT an event that causes BOTH the short-run aggregate supply (SRAS)curve and the long-run aggregate supply (LRAS)curve to shift?

Which of the following is NOT an assumption of the classical model?

A congressman states, "If a government attempts to increase employment through increased government spending, all we will end up with is a higher price level." This congressman assumes that the

Whom among the following was a classical economist?

Keynes suggested that the short-run aggregate supply (SRAS)curve

-In the above figure, what are the long-run equilibrium price level and real GDP?

Keynes and his followers believed that

The equilibrating force in the credit market in the classical model is

In the short run, real GDP can increase beyond a level consistent with the long-run growth path if

"According to Keynes, the economy is essentially a self-regulating system." Do you agree or disagree? Why?

In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that