Question 1

Which of the following is not an example of a short term macroeconomic "shock"?

Accepted Answer

A) planned investment expenditures 
B) a hurricane 
C) increased military spending 
D) a change in the tax code 
E) new technology 
A) planned investment expenditures 
B) a hurricane 
C) increased military spending 
D) a change in the tax code 
E) new technology

Question 2

-The table below displays the United States' potential and actual output for six select months between 1960 and 2009.In which month does the economy have the largest expansionary gap? Largest recessionary gap?
Table 9.1: Actual and Potential Output,in billions $s

Accepted Answer

We use the equation: @#IMG-DLM& From thi

Question 3

The Phillips curve shows the negative relationship between output fluctuations and the change in inflation.

Accepted Answer

A) True 
 B)False

Question 4

The relationship between actual output in an economy,the long-run component,and the short-run component is given as: Long-run trend = Current output + Shortrun fluctuations.

Accepted Answer

A) True 
 B)False

Question 5

-Consider Figure 9.2,which represents  
t.In approximately what years did the U.S.economy experience its longest economic downturn,using the text's definition?

Accepted Answer

A) 1990-1997 
B) 1974-1978 
C) 1980-1988 
D) 1957-1963 
E) cannot be determined from the information given 
A) 1990-1997 
B) 1974-1978 
C) 1980-1988 
D) 1957-1963 
E) cannot be determined from the information given

Question 6

Generally speaking,the rate of inflation rises during a recession.

Accepted Answer

A) True 
 B)False

Question 7

-Consider the Phillips curve at  
,1 in Figure 9.3.

Accepted Answer

A) The economy is booming. 
B) The economy is inflationary. 
C) The economy is at potential output. 
D) The economy is in recession. 
E) Both a and b are correct. 
A) The economy is booming. 
B) The economy is inflationary. 
C) The economy is at potential output. 
D) The economy is in recession. 
E) Both a and b are correct.

Question 8

A decline in long-term productivity implies that an economy requires more resources to produce goods;therefore,as costs of production rise,we should see an acceleration in inflation.

Accepted Answer

A) True 
 B)False

Question 9

Output fluctuations are defined as __________.

Accepted Answer

A) the amount of output where inflation is about 2 percent 
B) what an economy produces when it is at capacity 
C) the percentage difference between current output and potential output 
D) the amount of total output if all inputs were utilized at their long-run sustainable levels 
E) the amount of output where unemployment is zero 
A) the amount of output where inflation is about 2 percent 
B) what an economy produces when it is at capacity 
C) the percentage difference between current output and potential output 
D) the amount of total output if all inputs were utilized at their long-run sustainable levels 
E) the amount of output where unemployment is zero

Question 10

In 1980,the inflation rate reached about 14 percent,due in part to ___________.The Board of Governors of the Federal Reserve under __________ decided to __________ interest rates,sending the economy into a __________.

Accepted Answer

A) a fall in oil prices;Volcker;raise;recession 
B) an increase consumer spending;Volcker;reduce;recession 
C) an increase in oil prices;Volcker;raise;recession 
D) an increase in oil prices;Volcker;reduce;boom 
E) a fall in oil prices;Greenspan;raise;recession 
A) a fall in oil prices;Volcker;raise;recession 
B) an increase consumer spending;Volcker;reduce;recession 
C) an increase in oil prices;Volcker;raise;recession 
D) an increase in oil prices;Volcker;reduce;boom 
E) a fall in oil prices;Greenspan;raise;recession

Question 11

-Consider Figure 9.1.The dashed line is potential output and the solid line is current output;therefore,

Accepted Answer

A) areas a and b are booms. 
B) area b represents an economic boom,and area a is a recession. 
C) the economy is in neither a recession nor a boom in areas a and b. 
D) area a represents an economic boom,and area b is a recession. 
A) areas a and b are booms. 
B) area b represents an economic boom,and area a is a recession. 
C) the economy is in neither a recession nor a boom in areas a and b. 
D) area a represents an economic boom,and area b is a recession.

Question 12

The short-run model determines __________ and __________.

Accepted Answer

A) current output;current inflation 
B) current output;long-run inflation 
C) unemployment;current inflation 
D) unemployment;potential output 
E) potential output;unemployment 
A) current output;current inflation 
B) current output;long-run inflation 
C) unemployment;current inflation 
D) unemployment;potential output 
E) potential output;unemployment

Question 13

Defining  
As current output,  
As potential output,and  
As short-run fluctuations,which of the following equations is correct?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 14

If   
the macroeconomy is in a recession.

Accepted Answer

A) True 
 B)False

Question 15

If  
,the macroeconomy is:

Accepted Answer

A) in a recession. 
B) in an expansion. 
C) at its potential level of output. 
D) Not enough information is given. 
E) none of the above 
A) in a recession. 
B) in an expansion. 
C) at its potential level of output. 
D) Not enough information is given. 
E) none of the above

Question 16

According to the Phillips curve presented in the text,a positive macroeconomic shock decreases the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 17

Suppose an economy exhibits a large unexpected decrease in productivity growth that lasts for a decade.However,monetary policymakers are slow to recognize that the change is to potential,not current,output,and interpret the decrease in output as a recession that leads current to fall below potential output.In this scenario,policymakers believe that __________ pressures are building and incorrectly respond by __________ interest rates,sending the economy into a(n)___________ gap.

Accepted Answer

A) inflationary;raising;inflationary 
B) inflationary;reducing;inflationary 
C) inflationary;raising;recessionary 
D) recessionary;reducing;inflationary 
E) Not enough information is given. 
A) inflationary;raising;inflationary 
B) inflationary;reducing;inflationary 
C) inflationary;raising;recessionary 
D) recessionary;reducing;inflationary 
E) Not enough information is given.

Question 18

What does the Phillips curve represent?

Accepted Answer

It is the positive relationshi

Question 19

The Phillips curve in the text shows the __________ relationship between __________ and __________.

Accepted Answer

A) positive;inflation;unemployment 
B) positive;inflation;short-term economic fluctuations 
C) positive;the change in inflation;short-term economic fluctuations 
D) negative;inflation;unemployment 
E) negative;the change in inflation;unemployment 
A) positive;inflation;unemployment 
B) positive;inflation;short-term economic fluctuations 
C) positive;the change in inflation;short-term economic fluctuations 
D) negative;inflation;unemployment 
E) negative;the change in inflation;unemployment

Question 20

If   
,the macroeconomy is producing at its potential level of output.

Accepted Answer

A) True 
 B)False

Which of the following is not an example of a short term macroeconomic "shock"?

-The table below displays the United States' potential and actual output for six select months between 1960 and 2009.In which month does the economy have the largest expansionary gap? Largest recessionary gap? Table 9.1: Actual and Potential Output,in billions $s

The Phillips curve shows the negative relationship between output fluctuations and the change in inflation.

The relationship between actual output in an economy,the long-run component,and the short-run component is given as: Long-run trend = Current output + Shortrun fluctuations.

-Consider Figure 9.2,which represents t.In approximately what years did the U.S.economy experience its longest economic downturn,using the text's definition?

Generally speaking,the rate of inflation rises during a recession.

-Consider the Phillips curve at ,1 in Figure 9.3.

A decline in long-term productivity implies that an economy requires more resources to produce goods;therefore,as costs of production rise,we should see an acceleration in inflation.

Output fluctuations are defined as __________.

In 1980,the inflation rate reached about 14 percent,due in part to _.The Board of Governors of the Federal Reserve under decided to interest rates,sending the economy into a .

-Consider Figure 9.1.The dashed line is potential output and the solid line is current output;therefore,

The short-run model determines and .

Defining As current output, As potential output,and As short-run fluctuations,which of the following equations is correct?

If the macroeconomy is in a recession.

If ,the macroeconomy is:

According to the Phillips curve presented in the text,a positive macroeconomic shock decreases the rate of inflation.

What does the Phillips curve represent?

The Phillips curve in the text shows the relationship between and __.

If ,the macroeconomy is producing at its potential level of output.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 9: An Introduction to the Short Run

Which of the following is not an example of a short term macroeconomic "shock"?

-The table below displays the United States' potential and actual output for six select months between 1960 and 2009.In which month does the economy have the largest expansionary gap? Largest recessionary gap? Table 9.1: Actual and Potential Output,in billions $s

The Phillips curve shows the negative relationship between output fluctuations and the change in inflation.

The relationship between actual output in an economy,the long-run component,and the short-run component is given as: Long-run trend = Current output + Shortrun fluctuations.

-Consider Figure 9.2,which represents t.In approximately what years did the U.S.economy experience its longest economic downturn,using the text's definition?

Generally speaking,the rate of inflation rises during a recession.

-Consider the Phillips curve at ,1 in Figure 9.3.

A decline in long-term productivity implies that an economy requires more resources to produce goods;therefore,as costs of production rise,we should see an acceleration in inflation.

Output fluctuations are defined as __________.

In 1980,the inflation rate reached about 14 percent,due in part to ___________.The Board of Governors of the Federal Reserve under __________ decided to __________ interest rates,sending the economy into a __________.

-Consider Figure 9.1.The dashed line is potential output and the solid line is current output;therefore,

The short-run model determines __________ and __________.

Defining As current output, As potential output,and As short-run fluctuations,which of the following equations is correct?

If the macroeconomy is in a recession.

If ,the macroeconomy is:

According to the Phillips curve presented in the text,a positive macroeconomic shock decreases the rate of inflation.

What does the Phillips curve represent?

The Phillips curve in the text shows the __________ relationship between __________ and __________.

If ,the macroeconomy is producing at its potential level of output.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

In 1980,the inflation rate reached about 14 percent,due in part to _.The Board of Governors of the Federal Reserve under decided to interest rates,sending the economy into a .

The short-run model determines and .

The Phillips curve in the text shows the relationship between and __.