Question 1

When output is below its full-employment level,the short-run aggregate supply will shift down and to the right because

Accepted Answer

A)  the expected price level will be below the actual price level. 
B)  workers' wages will decline. 
C)  prices of nonlabor inputs will rise. 
D)  workers' wages will rise. 
A)  the expected price level will be below the actual price level. 
B)  workers' wages will decline. 
C)  prices of nonlabor inputs will rise. 
D)  workers' wages will rise.

Question 2

How do new Keynesians use menu costs to help explain price stickiness in the short run?

Accepted Answer

New Keynesian economists argue that pric

Question 3

Which of the following statements is correct?

Accepted Answer

A)  New classicals believe that the aggregate supply curve is a vertical line in both the short run and the long run. 
B)  Both new classicals and new Keynesians believe that the aggregate supply curve is vertical in the long run. 
C)  New Keynesians believe that the aggregate supply curve is vertical in the short run but not in the long run. 
D)  New Keynesians believe that the aggregate supply curve slopes upward in the long run. 
A)  New classicals believe that the aggregate supply curve is a vertical line in both the short run and the long run. 
B)  Both new classicals and new Keynesians believe that the aggregate supply curve is vertical in the long run. 
C)  New Keynesians believe that the aggregate supply curve is vertical in the short run but not in the long run. 
D)  New Keynesians believe that the aggregate supply curve slopes upward in the long run.

Question 4

According to some economists,what contributed to the unusual uncertainty that adversely affected aggregate supply during the recovery following the recession of 2007-2009?

Accepted Answer

Given that the financial crisis and rece

Question 5

In comparing the views of economists on stabilization policy in the 1960s with the current views of economists on stabilization policy,one can say

Accepted Answer

A)  few economists in the 1960s favored stabilization policy, while most economists currently favor stabilization policy. 
B)  economists' views on stabilization policy have changed very little since the 1960s. 
C)  fewer economists currently believe it is possible to use stabilization policy to fine-tune the economy than in the 1960s. 
D)  almost no economists in the currently believe stabilization policy should be used. 
A)  few economists in the 1960s favored stabilization policy, while most economists currently favor stabilization policy. 
B)  economists' views on stabilization policy have changed very little since the 1960s. 
C)  fewer economists currently believe it is possible to use stabilization policy to fine-tune the economy than in the 1960s. 
D)  almost no economists in the currently believe stabilization policy should be used.

Question 6

An increase in the price level reduces net exports because

Accepted Answer

A)  it leads indirectly to a higher exchange rate. 
B)  it leads indirectly to a lower exchange rate. 
C)  it leads indirectly to a lower real interest rate. 
D)  it leads directly to higher real money balances. 
A)  it leads indirectly to a higher exchange rate. 
B)  it leads indirectly to a lower exchange rate. 
C)  it leads indirectly to a lower real interest rate. 
D)  it leads directly to higher real money balances.

Question 7

According to the new classical view,aggregate output will differ from full-employment output

Accepted Answer

A)  whenever saving does not equal investment. 
B)  only if the actual price level does not equal the expected price level. 
C)  only if the federal government's expenditures are greater than its tax receipts. 
D)  whenever imports exceed exports. 
A)  whenever saving does not equal investment. 
B)  only if the actual price level does not equal the expected price level. 
C)  only if the federal government's expenditures are greater than its tax receipts. 
D)  whenever imports exceed exports.

Question 8

Which of the following would cause the long-run aggregate supply curve to shift?

Accepted Answer

A)  an increase in the price level 
B)  a decrease in the expected price level 
C)  an increase in labor productivity 
D)  an autonomous increase in consumption spending 
A)  an increase in the price level 
B)  a decrease in the expected price level 
C)  an increase in labor productivity 
D)  an autonomous increase in consumption spending

Question 9

The best explanation of why the aggregate demand curve has a negative slope is that

Accepted Answer

A)  at a higher price level households cut back on their spending on goods and services. 
B)  at a higher price level business firms wish to produce more goods and services. 
C)  a higher price level results in lower real balances and a higher real interest rate. 
D)  a higher price level results in less government spending on transfers, such as unemployment insurance and social security payments. 
A)  at a higher price level households cut back on their spending on goods and services. 
B)  at a higher price level business firms wish to produce more goods and services. 
C)  a higher price level results in lower real balances and a higher real interest rate. 
D)  a higher price level results in less government spending on transfers, such as unemployment insurance and social security payments.

Question 10

Analyze the following statement: "I know the fact that prices have started to rise rapidly seems like bad news,but at least prices starting to go up means that output must be starting to go up as well."

Accepted Answer

If the increase in the price level is du

When output is below its full-employment level,the short-run aggregate supply will shift down and to the right because

How do new Keynesians use menu costs to help explain price stickiness in the short run?

Which of the following statements is correct?

According to some economists,what contributed to the unusual uncertainty that adversely affected aggregate supply during the recovery following the recession of 2007-2009?

In comparing the views of economists on stabilization policy in the 1960s with the current views of economists on stabilization policy,one can say

An increase in the price level reduces net exports because

According to the new classical view,aggregate output will differ from full-employment output

Which of the following would cause the long-run aggregate supply curve to shift?

The best explanation of why the aggregate demand curve has a negative slope is that

Analyze the following statement: "I know the fact that prices have started to rise rapidly seems like bad news,but at least prices starting to go up means that output must be starting to go up as well."

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory Ii: the Is-Mp Model

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Exam 17: Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

When output is below its full-employment level,the short-run aggregate supply will shift down and to the right because

How do new Keynesians use menu costs to help explain price stickiness in the short run?

Which of the following statements is correct?

According to some economists,what contributed to the unusual uncertainty that adversely affected aggregate supply during the recovery following the recession of 2007-2009?

In comparing the views of economists on stabilization policy in the 1960s with the current views of economists on stabilization policy,one can say

An increase in the price level reduces net exports because

According to the new classical view,aggregate output will differ from full-employment output

Which of the following would cause the long-run aggregate supply curve to shift?

The best explanation of why the aggregate demand curve has a negative slope is that

Analyze the following statement: "I know the fact that prices have started to rise rapidly seems like bad news,but at least prices starting to go up means that output must be starting to go up as well."

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory Ii: the Is-Mp Model

Filters