Question 1

Define 'derivative'.

Accepted Answer

A financial instrument whose value is derived from some other fixed-return asset.

Question 2

Explain the role of credit-rating agencies in the assessing the value of the new forms of financial securities

Accepted Answer

Security credit-rating agencies gave these new securities high marks-what is called a triple-A rating.These new securities paid a higher rate of return than old-fashioned T-Bills or bank savings accounts.

Question 3

What policy approaches were used during post World War II to stabilize the economy?

Accepted Answer

Countercyclical fiscal and monetary policy to 'fine tune' the economy.

Question 4

According to supply-siders,what is one of the keys to curbing stagflation?

Accepted Answer

A) Increasing the money supply and cutting government spending 
B) Using income policies to increase productivity 
C) Shifting the AD curve to the right 
D) Convincing people to buy domestic rather than foreign-produced goods 
E) Lowering taxes 
A) Increasing the money supply and cutting government spending 
B) Using income policies to increase productivity 
C) Shifting the AD curve to the right 
D) Convincing people to buy domestic rather than foreign-produced goods 
E) Lowering taxes

Question 5

Aggregate demand policies are effective in curing the problems of stagflation.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following best describes the federal government's annual budgets for the last eighteen years?

Accepted Answer

A) There were budget surpluses for the first several years,then budget deficits for several more,followed by two years of surpluses. 
B) There were budget deficits for the first couple of years,then budget surpluses for several more,followed by several years of deficits. 
C) There were budget deficits for all of the years. 
D) There were budget surpluses for all of the years. 
A) There were budget surpluses for the first several years,then budget deficits for several more,followed by two years of surpluses. 
B) There were budget deficits for the first couple of years,then budget surpluses for several more,followed by several years of deficits. 
C) There were budget deficits for all of the years. 
D) There were budget surpluses for all of the years.

Question 7

According to Say's Law,states that supply creates its own demand.
What does this mean?

Accepted Answer

· The act of production (supply)requires

Question 8

The Great Depression led to the development of Keynesian economics.
What does this approach argue?

Accepted Answer

· the economy could get trapped in a lon

Question 9

Neo-classical economists argued that any unemployment which did occur was strictly temporary.What was the basis of this argument?

Accepted Answer

· there is only one equilibrium wage lev

Question 10

What characterized the decades of the 1950s and 1960s?

Accepted Answer

A) Low growth and high unemployment 
B) Low unemployment and high inflation 
C) Stagflation 
D) Economic stability with reasonably low unemployment and inflation 
A) Low growth and high unemployment 
B) Low unemployment and high inflation 
C) Stagflation 
D) Economic stability with reasonably low unemployment and inflation

Question 11

Explain why the value of the Canadian dollar in terms of the U.S.dollar was low during the 1990s?

Accepted Answer

The value of the Canadian dollar was low

Question 12

What did supply-siders see as a solution for the economic problems of the 1970s and 1980s? Explain.

Accepted Answer

Supply-siders saw the solution for the e

Question 13

What is the essential difference between Keynesian and neoclassical views of macroeconomy?

Accepted Answer

A) The Keynesian view is that the economy is capable of automatically adjusting to economic changes because of the flexibility of wages,prices,and interest rates,while the neoclassical view is that the economy could get stuck in a recessionary gap because of their inflexibility. 
B) The neoclassical view is that the economy can automatically adjust to economic changes because of the flexibility of wages,prices,and interest rates,while the Keynesian view is that the economy could get stuck in a recessionary gap because of their inflexibility. 
C) While both views agree on the automatic adjustment ability of the economy,the Keynesian view sees wages as flexible,but the neoclassical view does not. 
D) While both views agree on the automatic adjustment ability of the economy,the neoclassical view sees wages as flexible,but the Keynesians do not. 
A) The Keynesian view is that the economy is capable of automatically adjusting to economic changes because of the flexibility of wages,prices,and interest rates,while the neoclassical view is that the economy could get stuck in a recessionary gap because of their inflexibility. 
B) The neoclassical view is that the economy can automatically adjust to economic changes because of the flexibility of wages,prices,and interest rates,while the Keynesian view is that the economy could get stuck in a recessionary gap because of their inflexibility. 
C) While both views agree on the automatic adjustment ability of the economy,the Keynesian view sees wages as flexible,but the neoclassical view does not. 
D) While both views agree on the automatic adjustment ability of the economy,the neoclassical view sees wages as flexible,but the Keynesians do not.

Question 14

According to Neoclassicist economists,what are the four pillars upon which the macroeconomy operates?

Accepted Answer

· the validity of Say's Law
·

Question 15

During the Great Depression,several changes in the economic performance occurred.What were these changes?

Accepted Answer

· Real GDP and prices decrease

Question 16

According to Neoclassical theory,if the demand for loanable funds by firms were to increase,what will cause the quantity supplied to also increase?

Accepted Answer

The resulting shortage of loan

Question 17

With which of the following events are derivatives,hedge funds,and sub-prime mortgages all associated?

Accepted Answer

A) The Great Depression 
B) The post-World War II economic boom period 
C) The financial crisis of 2008-2010 
D) The stagflation years of the 1970s 
A) The Great Depression 
B) The post-World War II economic boom period 
C) The financial crisis of 2008-2010 
D) The stagflation years of the 1970s

Question 18

Which of the following is a statement of Say's Law?

Accepted Answer

A) Demand creates its own supply. 
B) Supply creates its own demand. 
C) The costs of production decrease as output increases. 
D) The costs of production increase as output increases 
A) Demand creates its own supply. 
B) Supply creates its own demand. 
C) The costs of production decrease as output increases. 
D) The costs of production increase as output increases

Question 19

Keynes did not agree with neoclassical theory about prices and wages being flexible,nor did he believe that their adjustment would guarantee full employment.Why is this?

Accepted Answer

Keynes saw prices that were "sticky" and

Question 20

What is the significance of Keynesian economics?

Accepted Answer

Keynes's idea of greater government inte

Define 'derivative'.

Explain the role of credit-rating agencies in the assessing the value of the new forms of financial securities

What policy approaches were used during post World War II to stabilize the economy?

According to supply-siders,what is one of the keys to curbing stagflation?

Aggregate demand policies are effective in curing the problems of stagflation.

Which of the following best describes the federal government's annual budgets for the last eighteen years?

According to Say's Law,states that supply creates its own demand. What does this mean?

The Great Depression led to the development of Keynesian economics. What does this approach argue?

Neo-classical economists argued that any unemployment which did occur was strictly temporary.What was the basis of this argument?

What characterized the decades of the 1950s and 1960s?

Explain why the value of the Canadian dollar in terms of the U.S.dollar was low during the 1990s?

What did supply-siders see as a solution for the economic problems of the 1970s and 1980s? Explain.

What is the essential difference between Keynesian and neoclassical views of macroeconomy?

According to Neoclassicist economists,what are the four pillars upon which the macroeconomy operates?

During the Great Depression,several changes in the economic performance occurred.What were these changes?

According to Neoclassical theory,if the demand for loanable funds by firms were to increase,what will cause the quantity supplied to also increase?

With which of the following events are derivatives,hedge funds,and sub-prime mortgages all associated?

Which of the following is a statement of Say's Law?

Keynes did not agree with neoclassical theory about prices and wages being flexible,nor did he believe that their adjustment would guarantee full employment.Why is this?

What is the significance of Keynesian economics?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

Filters

Exam 13: A Walk Through the Twentieth Century and Beyond

Define 'derivative'.

Explain the role of credit-rating agencies in the assessing the value of the new forms of financial securities

What policy approaches were used during post World War II to stabilize the economy?

According to supply-siders,what is one of the keys to curbing stagflation?

Aggregate demand policies are effective in curing the problems of stagflation.

Which of the following best describes the federal government's annual budgets for the last eighteen years?

According to Say's Law,states that supply creates its own demand. What does this mean?

The Great Depression led to the development of Keynesian economics. What does this approach argue?

Neo-classical economists argued that any unemployment which did occur was strictly temporary.What was the basis of this argument?

What characterized the decades of the 1950s and 1960s?

Explain why the value of the Canadian dollar in terms of the U.S.dollar was low during the 1990s?

What did supply-siders see as a solution for the economic problems of the 1970s and 1980s? Explain.

What is the essential difference between Keynesian and neoclassical views of macroeconomy?

According to Neoclassicist economists,what are the four pillars upon which the macroeconomy operates?

During the Great Depression,several changes in the economic performance occurred.What were these changes?

According to Neoclassical theory,if the demand for loanable funds by firms were to increase,what will cause the quantity supplied to also increase?

With which of the following events are derivatives,hedge funds,and sub-prime mortgages all associated?

Which of the following is a statement of Say's Law?

Keynes did not agree with neoclassical theory about prices and wages being flexible,nor did he believe that their adjustment would guarantee full employment.Why is this?

What is the significance of Keynesian economics?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

Filters