Question 1

The founder of the classical school of economics was:

Accepted Answer

A)  Jean Say. 
B)  John Keynes. 
C)  Adam Smith. 
D)  John Howard. 
A)  Jean Say. 
B)  John Keynes. 
C)  Adam Smith. 
D)  John Howard.

Question 2

The aggregate demand curve:

Accepted Answer

A)  shows the level of real GDP purchased in the economy at different possible price levels during a period of time. 
B)  shows the level of real GDP produced in the economy at different possible price levels during a period of time. 
C)  shifts to the left whenever there is an increase in aggregate expenditures. 
D)  slopes upward and shifts to the left whenever there is an increase in aggregate
Expenditures. 
A)  shows the level of real GDP purchased in the economy at different possible price levels during a period of time. 
B)  shows the level of real GDP produced in the economy at different possible price levels during a period of time. 
C)  shifts to the left whenever there is an increase in aggregate expenditures. 
D)  slopes upward and shifts to the left whenever there is an increase in aggregate
Expenditures.

Question 3

Which range is not a part of the aggregate supply curve?

Accepted Answer

A)  Keynesian range. 
B)  Intermediate range. 
C)  Classical range. 
D)  Neo-Classical range. 
A)  Keynesian range. 
B)  Intermediate range. 
C)  Classical range. 
D)  Neo-Classical range.

Question 4

Other factors held constant, a decrease in labour cost will shift the aggregate:

Accepted Answer

A)  demand curve leftward. 
B)  demand curve rightward. 
C)  supply curve leftward. 
D)  supply curve rightward. 
A)  demand curve leftward. 
B)  demand curve rightward. 
C)  supply curve leftward. 
D)  supply curve rightward.

Question 5

Technological progress often results in:

Accepted Answer

A)  a fall in investment as firms can produce more output for fewer inputs, including capital. 
B)  a rise in investment as firms try to take advantage of these improvements. 
C)  no change in investment, as a rise in some investment is offset by decreases in other areas of investment. 
D)  a rise in investment only if it is accompanied by a fall in the interest rate. 
A)  a fall in investment as firms can produce more output for fewer inputs, including capital. 
B)  a rise in investment as firms try to take advantage of these improvements. 
C)  no change in investment, as a rise in some investment is offset by decreases in other areas of investment. 
D)  a rise in investment only if it is accompanied by a fall in the interest rate.

Question 6

Other factors held constant, a decrease in resource prices will shift the aggregate:

Accepted Answer

A)  demand curve leftward. 
B)  demand curve rightward. 
C)  supply curve leftward. 
D)  supply curve rightward. 
A)  demand curve leftward. 
B)  demand curve rightward. 
C)  supply curve leftward. 
D)  supply curve rightward.

Question 7

The aggregate supply curve:

Accepted Answer

A)  shows the level of nominal GDP that firms are willing to produce at different
Price levels. 
B)  shows the level of real GDP that firms are willing to consume at different price levels. 
C)  shows the level of real GDP that firms are willing to produce at different price levels. 
D)  shows the amount of goods and services consumers are willing to buy at different
Price levels. 
A)  shows the level of nominal GDP that firms are willing to produce at different
Price levels. 
B)  shows the level of real GDP that firms are willing to consume at different price levels. 
C)  shows the level of real GDP that firms are willing to produce at different price levels. 
D)  shows the amount of goods and services consumers are willing to buy at different
Price levels.

Question 8

According to the interest-rate effect, as the price level:

Accepted Answer

A)  rises, people feel poorer and buy less. 
B)  rises, Australian products become more expensive and foreigners buy fewer Australian goods. 
C)  rises, interest rates fall and people buy less. 
D)  rises, interest rates rise and people buy less. 
A)  rises, people feel poorer and buy less. 
B)  rises, Australian products become more expensive and foreigners buy fewer Australian goods. 
C)  rises, interest rates fall and people buy less. 
D)  rises, interest rates rise and people buy less.

Question 9

The aggregate demand curve shows how real GDP purchased varies with changes in:

Accepted Answer

A)  unemployment. 
B)  output. 
C)  the price level. 
D)  the interest rate. 
A)  unemployment. 
B)  output. 
C)  the price level. 
D)  the interest rate.

Question 10

Keynes placed great primacy on the:

Accepted Answer

A)  production function. 
B)  supply side of the economy. 
C)  demand side of the economy. 
D)  delivery of inputs to producer. 
A)  production function. 
B)  supply side of the economy. 
C)  demand side of the economy. 
D)  delivery of inputs to producer.

Question 11

A decrease in aggregate supply can lead to:

Accepted Answer

A)  unemployment. 
B)  demand-pull inflation. 
C)  prosperity. 
D)  cost-push inflation. 
A)  unemployment. 
B)  demand-pull inflation. 
C)  prosperity. 
D)  cost-push inflation.

Question 12

________ noted that the aggregate demand is not necessarily always equal to total production.

Accepted Answer

A)  Churchill 
B)  Smith 
C)  Say 
D)  Keynes 
A)  Churchill 
B)  Smith 
C)  Say 
D)  Keynes

Question 13

Narrbegin Exhibit 14.1 Aggregate supply curve   
-In Exhibit 14.1, higher price levels allow producers to earn higher profits, stimulating production and employment in:

Accepted Answer

A)  the segment labelled ab. 
B)  the segment labelled bc. 
C)  the segment labelled cd. 
D)  both segment bc and segment cd. 
A)  the segment labelled ab. 
B)  the segment labelled bc. 
C)  the segment labelled cd. 
D)  both segment bc and segment cd.

Question 14

Suppose an increase in government spending stimulates real GDP without affecting the price level. What is the relevant range of the aggregate supply curve in this case?

Accepted Answer

A)  The classical range. 
B)  The intermediate range. 
C)  The Keynesian range. 
D)  The monetarist range. 
A)  The classical range. 
B)  The intermediate range. 
C)  The Keynesian range. 
D)  The monetarist range.

Question 15

Stagflation occurs when the economy experiences:

Accepted Answer

A)  low unemployment and low inflation. 
B)  high unemployment and rapid inflation. 
C)  low unemployment and rapid inflation. 
D)  high unemployment and low inflation. 
A)  low unemployment and low inflation. 
B)  high unemployment and rapid inflation. 
C)  low unemployment and rapid inflation. 
D)  high unemployment and low inflation.

Question 16

If your MPS is 0.60 that means that:

Accepted Answer

A)  for every dollar increase in your disposable income, consumption will decrease by 60 cents. 
B)  for every dollar decrease in your disposable income, consumption will increase by 60 cents. 
C)  for every dollar increase in your disposable income, consumption will increase by 60 cents. 
D)  for every dollar increase in your disposable income, consumption will remain unchanged. 
A)  for every dollar increase in your disposable income, consumption will decrease by 60 cents. 
B)  for every dollar decrease in your disposable income, consumption will increase by 60 cents. 
C)  for every dollar increase in your disposable income, consumption will increase by 60 cents. 
D)  for every dollar increase in your disposable income, consumption will remain unchanged.

Question 17

The concurrent problems of inflation and unemployment are termed:

Accepted Answer

A)  depression. 
B)  downturn. 
C)  deflation. 
D)  stagflation. 
A)  depression. 
B)  downturn. 
C)  deflation. 
D)  stagflation.

Question 18

Advances in technology will shift the aggregate:

Accepted Answer

A)  demand curve rightward. 
B)  supply curve rightward. 
C)  demand curve leftward. 
D)  supply curve leftward. 
A)  demand curve rightward. 
B)  supply curve rightward. 
C)  demand curve leftward. 
D)  supply curve leftward.

Question 19

Which of the following characterises the classical view of the economy?

Accepted Answer

A)  The economy is inherently unstable. 
B)  Prices and wages are not flexible. 
C)  The economy will automatically self-correct to full employment. 
D)  The economy needs government intervention to adjust to full employment. 
A)  The economy is inherently unstable. 
B)  Prices and wages are not flexible. 
C)  The economy will automatically self-correct to full employment. 
D)  The economy needs government intervention to adjust to full employment.

Question 20

If the terms of trade increase then, ceteris paribus:

Accepted Answer

A)  imports will fall. 
B)  imports will rise. 
C)  exports will rise. 
D)  exports will fall. 
A)  imports will fall. 
B)  imports will rise. 
C)  exports will rise. 
D)  exports will fall.

The founder of the classical school of economics was:

The aggregate demand curve:

Which range is not a part of the aggregate supply curve?

Other factors held constant, a decrease in labour cost will shift the aggregate:

Technological progress often results in:

Other factors held constant, a decrease in resource prices will shift the aggregate:

The aggregate supply curve:

According to the interest-rate effect, as the price level:

The aggregate demand curve shows how real GDP purchased varies with changes in:

Keynes placed great primacy on the:

A decrease in aggregate supply can lead to:

________ noted that the aggregate demand is not necessarily always equal to total production.

Narrbegin Exhibit 14.1 Aggregate supply curve -In Exhibit 14.1, higher price levels allow producers to earn higher profits, stimulating production and employment in:

Suppose an increase in government spending stimulates real GDP without affecting the price level. What is the relevant range of the aggregate supply curve in this case?

Stagflation occurs when the economy experiences:

If your MPS is 0.60 that means that:

The concurrent problems of inflation and unemployment are termed:

Advances in technology will shift the aggregate:

Which of the following characterises the classical view of the economy?

If the terms of trade increase then, ceteris paribus:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 15: A Simple Model of the Macro Economy

The founder of the classical school of economics was:

The aggregate demand curve:

Which range is not a part of the aggregate supply curve?

Other factors held constant, a decrease in labour cost will shift the aggregate:

Technological progress often results in:

Other factors held constant, a decrease in resource prices will shift the aggregate:

The aggregate supply curve:

According to the interest-rate effect, as the price level:

The aggregate demand curve shows how real GDP purchased varies with changes in:

Keynes placed great primacy on the:

A decrease in aggregate supply can lead to:

________ noted that the aggregate demand is not necessarily always equal to total production.

Narrbegin Exhibit 14.1 Aggregate supply curve -In Exhibit 14.1, higher price levels allow producers to earn higher profits, stimulating production and employment in:

Suppose an increase in government spending stimulates real GDP without affecting the price level. What is the relevant range of the aggregate supply curve in this case?

Stagflation occurs when the economy experiences:

If your MPS is 0.60 that means that:

The concurrent problems of inflation and unemployment are termed:

Advances in technology will shift the aggregate:

Which of the following characterises the classical view of the economy?

If the terms of trade increase then, ceteris paribus:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters