Question 1

Inflation in the U.S.economy tends to be:

Accepted Answer

A)  a finite,one-time event resulting from a shock. 
B)  ongoing,as increases in aggregate demand generally exceed the increases in aggregate supply. 
C)  a finite,one-time event as the Fed actively works to eliminate all inflation. 
D)  ongoing,as aggregate supply is continually shifting to the left. 
A)  a finite,one-time event resulting from a shock. 
B)  ongoing,as increases in aggregate demand generally exceed the increases in aggregate supply. 
C)  a finite,one-time event as the Fed actively works to eliminate all inflation. 
D)  ongoing,as aggregate supply is continually shifting to the left.

Question 2

According to the research of Christina Romer and David Romer:

Accepted Answer

A)  a tax reduction of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent. 
B)  a tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent. 
C)  a tax reduction of 2 to 3 percent raises real GDP by roughly 1 percent. 
D)  a tax increase of 2 to 3 percent lowers real GDP by roughly 1 percent. 
A)  a tax reduction of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent. 
B)  a tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent. 
C)  a tax reduction of 2 to 3 percent raises real GDP by roughly 1 percent. 
D)  a tax increase of 2 to 3 percent lowers real GDP by roughly 1 percent.

Question 3

The Laffer Curve is a central concept in:

Accepted Answer

A)  monetarism. 
B)  Keynesianism. 
C)  welfare economics. 
D)  supply-side economics. 
A)  monetarism. 
B)  Keynesianism. 
C)  welfare economics. 
D)  supply-side economics.

Question 4

In the last half of the 1990s,the usual short-run trade-off between inflation and unemployment did not arise because:

Accepted Answer

A)  the Fed held interest rates constant. 
B)  the federal government balanced its budget. 
C)  the U.S.personal savings rate rose. 
D)  productivity (and thus aggregate supply)grew faster than previously. 
A)  the Fed held interest rates constant. 
B)  the federal government balanced its budget. 
C)  the U.S.personal savings rate rose. 
D)  productivity (and thus aggregate supply)grew faster than previously.

Question 5

(Consider This)Economist Arthur Laffer equated Robin Hood to:

Accepted Answer

A)  government and equated the people passing through Sherwood Forest to taxpayers. 
B)  charitable organizations and equated the people passing through Sherwood Forest to poor people. 
C)  businesses and equated the people passing through Sherwood Forest to consumers. 
D)  government and equated the people passing through Sherwood Forest to importers of goods and services. 
A)  government and equated the people passing through Sherwood Forest to taxpayers. 
B)  charitable organizations and equated the people passing through Sherwood Forest to poor people. 
C)  businesses and equated the people passing through Sherwood Forest to consumers. 
D)  government and equated the people passing through Sherwood Forest to importers of goods and services.

Question 6

In the long run:

Accepted Answer

A)  attempts to "fine-tune" the economy cause the rate of unemployment to accelerate. 
B)  there is no inflation-unemployment trade-off. 
C)  there is an inflation-unemployment trade-off and the terms of that trade-off have worsened in recent years. 
D)  there is an inflation-unemployment trade-off,but the terms of that trade-off have improved in recent years. 
A)  attempts to "fine-tune" the economy cause the rate of unemployment to accelerate. 
B)  there is no inflation-unemployment trade-off. 
C)  there is an inflation-unemployment trade-off and the terms of that trade-off have worsened in recent years. 
D)  there is an inflation-unemployment trade-off,but the terms of that trade-off have improved in recent years.

Question 7

The last few years of the 1990s in the United States were characterized by:

Accepted Answer

A)  low inflation and high unemployment. 
B)  stagflation. 
C)  low inflation and low unemployment. 
D)  a high misery index. 
A)  low inflation and high unemployment. 
B)  stagflation. 
C)  low inflation and low unemployment. 
D)  a high misery index.

Question 8

The short-run aggregate supply curve is upsloping because higher price levels:

Accepted Answer

A)  lower interest rates and encourage firms to invest and produce more. 
B)  create incentives to expand output when resource prices are unresponsive to price-level changes. 
C)  encourage importation of foreign goods. 
D)  create an expectation among producers of still higher price levels. 
A)  lower interest rates and encourage firms to invest and produce more. 
B)  create incentives to expand output when resource prices are unresponsive to price-level changes. 
C)  encourage importation of foreign goods. 
D)  create an expectation among producers of still higher price levels.

Question 9

Suppose the full employment level of real output (Q)for a hypothetical economy is $500,the price level (P)initially is 100,and prices and wages are flexible both upward and downward.Use the following short-run aggregate supply schedules to answer the question.   Refer to the information given.In the long run,a fall in the price level from 100 to 75 will:

Accepted Answer

A)  decrease real output from $500 to $440. 
B)  increase real output from $500 to $620. 
C)  change the aggregate supply schedule from (a)to (c)and produce an equilibrium level of real output of $500. 
D)  change the aggregate supply schedule from (a)to (b)and produce an equilibrium level of real output of $500. 
A)  decrease real output from $500 to $440. 
B)  increase real output from $500 to $620. 
C)  change the aggregate supply schedule from (a)to (c)and produce an equilibrium level of real output of $500. 
D)  change the aggregate supply schedule from (a)to (b)and produce an equilibrium level of real output of $500.

Question 10

Answer the question on the basis of the following economic data for a hypothetical economy: $\begin{array}{c}
\begin{array}{c}
\
\
\
\text { Year } \
\hline 1997 \
1998 \
1999 \
2000
\end{array}
\begin{array}{c}
\text {Average}\
\text {Hourly}\
\text {Wage}\
\underline{\text {Rates}}\
\$ 6.40 \
6.72\
7.24\
8.02
\end{array}
\begin{array}{c}
\
\text {Index of}\
\text { Industrial}\
\underline{\text {Production}}\
197\
199\
196\
192
\end{array}

\begin{array}{c}
\
\
\text {Unemployment}\
\underline{\text {Rate}}\
 5.5 \% \
5.8\
7.2\
8.3
\end{array}

\begin{array}{c}
\
\text {Price}\
\text {Level}\
\underline{\text {Index}}\
130\
133\
139\
147
\end{array}

\begin{array}{c}
\
\text {Rate of}\
\text { Increase in}\
\underline{\text {Productivity}}\
3.0 \% \
2.9\
3.1\
2.8
\end{array}

\end{array}$
 Refer to the given data.This economy has encountered stagflation.

Accepted Answer

A) True 
 B)False

Question 11

If government uses its stabilization policies to maintain full employment under conditions of cost-push inflation:

Accepted Answer

A)  a deflationary spiral is likely to occur. 
B)  an inflationary spiral is likely to occur. 
C)  stagflation is likely to occur. 
D)  the Phillips Curve is likely to shift inward. 
A)  a deflationary spiral is likely to occur. 
B)  an inflationary spiral is likely to occur. 
C)  stagflation is likely to occur. 
D)  the Phillips Curve is likely to shift inward.

Inflation in the U.S.economy tends to be:

According to the research of Christina Romer and David Romer:

The Laffer Curve is a central concept in:

In the last half of the 1990s,the usual short-run trade-off between inflation and unemployment did not arise because:

(Consider This)Economist Arthur Laffer equated Robin Hood to:

In the long run:

The last few years of the 1990s in the United States were characterized by:

The short-run aggregate supply curve is upsloping because higher price levels:

If government uses its stabilization policies to maintain full employment under conditions of cost-push inflation:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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Exam 37: Extending the Analysis of Aggregate Supply

Inflation in the U.S.economy tends to be:

According to the research of Christina Romer and David Romer:

The Laffer Curve is a central concept in:

In the last half of the 1990s,the usual short-run trade-off between inflation and unemployment did not arise because:

(Consider This)Economist Arthur Laffer equated Robin Hood to:

In the long run:

The last few years of the 1990s in the United States were characterized by:

The short-run aggregate supply curve is upsloping because higher price levels:

If government uses its stabilization policies to maintain full employment under conditions of cost-push inflation:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters