Question 1

Fine-tuning the economy means

Accepted Answer

A)  making government economic policy more "people oriented" 
B)  using government policies to adjust the economy and promote economic stability 
C)  tinkering with microeconomic problems such as externalities and losing sight of the big picture 
D)  placing fewer regulations on the private sector,thereby eliminating the need for government intervention 
E)  designing policies based exclusively on the leading economic indicators 
A)  making government economic policy more "people oriented" 
B)  using government policies to adjust the economy and promote economic stability 
C)  tinkering with microeconomic problems such as externalities and losing sight of the big picture 
D)  placing fewer regulations on the private sector,thereby eliminating the need for government intervention 
E)  designing policies based exclusively on the leading economic indicators

Question 2

Stagflation is a situation with high unemployment rates,high inflation rates,and little or no growth in the economy.

Accepted Answer

A) True 
 B)False

Question 3

According to Keynes,in order to get the economy out of a recession,the government should

Accepted Answer

A)  plan for a budget deficit 
B)  encourage firms to export to other nations,thereby jump-starting the economy 
C)  follow an expansionary monetary policy 
D)  follow a contractionary monetary policy 
E)  do nothing and rely on the market system to heal itself 
A)  plan for a budget deficit 
B)  encourage firms to export to other nations,thereby jump-starting the economy 
C)  follow an expansionary monetary policy 
D)  follow a contractionary monetary policy 
E)  do nothing and rely on the market system to heal itself

Question 4

Which of the following is a reason why the aggregate demand curve slopes downward?

Accepted Answer

A)  At a higher price level,fewer goods and services are available. 
B)  Periods when the price level is rising are usually times of swift declines in economic activity. 
C)  Households feel poorer with an increase in average prices. 
D)  If the U.S.price level rises,foreigners will buy more U.S.goods,leaving fewer U.S.goods for domestic consumers. 
E)  As the price level rises,business leaders become pessimistic about the future and reduce production. 
A)  At a higher price level,fewer goods and services are available. 
B)  Periods when the price level is rising are usually times of swift declines in economic activity. 
C)  Households feel poorer with an increase in average prices. 
D)  If the U.S.price level rises,foreigners will buy more U.S.goods,leaving fewer U.S.goods for domestic consumers. 
E)  As the price level rises,business leaders become pessimistic about the future and reduce production.

Question 5

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

Accepted Answer

A)  reduce; reduces; fulfilled 
B)  reduce; increases; fulfilled 
C)  reduce; increases; not met 
D)  increase; increases; not met 
E)  increase; reduces; fulfilled 
A)  reduce; reduces; fulfilled 
B)  reduce; increases; fulfilled 
C)  reduce; increases; not met 
D)  increase; increases; not met 
E)  increase; reduces; fulfilled

Question 6

A rise in the price level

Accepted Answer

A)  moves the economy rightward along the aggregate demand curve 
B)  moves the economy leftward along the aggregate demand curve 
C)  shifts the aggregate demand curve to the left 
D)  shifts the aggregate demand curve to the right 
E)  is inconsistent with the other-things-constant assumption on which the aggregate demand curve is based 
A)  moves the economy rightward along the aggregate demand curve 
B)  moves the economy leftward along the aggregate demand curve 
C)  shifts the aggregate demand curve to the left 
D)  shifts the aggregate demand curve to the right 
E)  is inconsistent with the other-things-constant assumption on which the aggregate demand curve is based

Question 7

If both aggregate demand and aggregate supply increase,then employment will increase.

Accepted Answer

A) True 
 B)False

Question 8

The aggregate supply curve has

Accepted Answer

A)  a negative slope 
B)  a positive slope 
C)  a zero slope (a horizontal line) 
D)  an infinite slope (a vertical line) 
E)  a negative slope like the aggregate demand curve,only steeper 
A)  a negative slope 
B)  a positive slope 
C)  a zero slope (a horizontal line) 
D)  an infinite slope (a vertical line) 
E)  a negative slope like the aggregate demand curve,only steeper

Question 9

The word stagflation describes a situation in which a higher price level occurs simultaneously with

Accepted Answer

A)  lower employment 
B)  lower unemployment 
C)  higher aggregate output 
D)  federal budget deficits 
E)  federal budget surpluses 
A)  lower employment 
B)  lower unemployment 
C)  higher aggregate output 
D)  federal budget deficits 
E)  federal budget surpluses

Fine-tuning the economy means

Stagflation is a situation with high unemployment rates,high inflation rates,and little or no growth in the economy.

According to Keynes,in order to get the economy out of a recession,the government should

Which of the following is a reason why the aggregate demand curve slopes downward?

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

A rise in the price level

If both aggregate demand and aggregate supply increase,then employment will increase.

The aggregate supply curve has

The word stagflation describes a situation in which a higher price level occurs simultaneously with

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Productivity and Growth

Tracking the US Economy

Unemployment and Inflation

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Developing and Transitional Economies

Understanding Graphs

National Income Accounts

Variable Net Exports

Variable Net Exports Revisited

The Algebra of Income and Expenditure

The Algebra of Demand-Side Equilibrium

Filters

Exam 5: Introduction to Macroeconomics

Fine-tuning the economy means

Stagflation is a situation with high unemployment rates,high inflation rates,and little or no growth in the economy.

According to Keynes,in order to get the economy out of a recession,the government should

Which of the following is a reason why the aggregate demand curve slopes downward?

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

A rise in the price level

If both aggregate demand and aggregate supply increase,then employment will increase.

The aggregate supply curve has

The word stagflation describes a situation in which a higher price level occurs simultaneously with

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Productivity and Growth

Tracking the US Economy

Unemployment and Inflation

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Developing and Transitional Economies

Understanding Graphs

National Income Accounts

Variable Net Exports

Variable Net Exports Revisited

The Algebra of Income and Expenditure

The Algebra of Demand-Side Equilibrium

Filters

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