Exam 6: Introduction to Macroeconomics

If spending by the federal government exceeds tax revenues, aggregate demand decreases.

Which of the following is a stock variable?

Exhibit 5-2 -Refer to Exhibit 5-2. Which line or point represents aggregate supply?

In U.S. history, recessions have usually lasted longer than expansion periods.

The U.S. economy has experienced alternating periods of expansion and contraction in economic activity relative to its long-term growth trend in the economy. These are called economic fluctuations or business cycles.

Exhibit 5-1 -In Exhibit 5-1, in period 1 the equilibrium GDP falls from 10,000 to 6,000 when aggregate demand falls from AD to AD'.

Which of the following statements is correct?

When output __________, employment is expected to __________.

If both aggregate demand and aggregate supply increase, then employment will increase.

In combating stagflation, a government-induced

The Reagan administration's 1981 investment tax changes were designed to

If the government owes $3,500 billion and then borrows $300 billion more this year,

If the U.S. price level increased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change. How will this be illustrated?

The tax cuts passed during the Reagan administration were designed primarily

If the economy experiences stagflation,

If the wealth of consumers increases substantially, this would shift

Fine-tuning the economy means

On an aggregate demand and aggregate supply graph, the stagflation of the 1970s can be represented as a

Long-term growth in production can be partially explained by