Exam 5: Introduction to Macroeconomics

According to Keynes,"animal spirits"

Suppliers have an incentive to increase aggregate output whenever the price level rises faster than the cost of production.

If spending by the federal government exceeds tax revenues,aggregate demand decreases.

Long-term growth in production can be partially explained by

The aggregate supply curve indicates

Long-term growth in production can be partially explained by

If business leaders become optimistic about future sales and profits,they will __________ spending on plant and equipment,which __________ employment and income and,therefore,their expectations are __________.

On an aggregate demand and aggregate supply graph,the stagflation of the 1970s can be represented as a

Exhibit 5-2 -Refer to Exhibit 5-2.Which line or point represents equilibrium?

Which of the following was a central argument of Keynes's General Theory?

The U.S.economy has experienced alternating periods of expansion and contraction in economic activity relative to its long-term growth trend in the economy.These are called economic fluctuations or business cycles.

A decrease in the price level will cause

By a leading economic indicator,economists mean

Exhibit 5-2 -Refer to Exhibit 5-2.Which line or point represents aggregate demand?

Exhibit 5-1 -Exhibit 5-1 shows that from the beginning of period 1 to the end of period 2,

Since the Great Depression,business fluctuations have become more severe and longer in duration.

Which of the following best describes the Keynesian approach to economic policy?

Stagflation refers to

In terms of the aggregate demand and supply framework,the Great Depression can be viewed in terms of a

Certain economic activities signal forthcoming changes in the economy.These are known as the