Exam 11: Classical and Keynesian Macro Analyses

According to the classical model, the income generated by production is

Q: How many economists does it take to change a light bulb? A: All. Because then you will generate employment, more consumption, moving the aggregate demand curve to the right. This joke represents the view of

The relationship between the price level and the real Gross Domestic Product (GDP) without full adjustment or full information is represented by

All of the following will cause the aggregate supply curve to shift to the right EXCEPT

According to the classical theory, an inward shift in aggregate demand would reduce

Which of the following is NOT a major assumption of the classical model?

According to the classical model, an increase in aggregate demand would

A reduction in nominal wages will cause which of the following?

Classical economists suggest that unemployment is a short-lived phenomenon because

According to classical economists, when aggregate demand decreases

The short-run aggregate supply curve in modern Keynesian analysis

If the U.S. dollar becomes stronger in international foreign exchange markets, imported goods become less expensive. One immediate result of this is that

In the classical model, an increase in the unemployment rate

Along a short-run aggregate supply curve, which of the following is (are) held constant?

In an economy with no government and no international trade, consumption expenditures will be less than the total value of goods and services when

According to the classical model

Saving is NOT a problem in the classical model because

In the short run, real GDP can increase beyond a level consistent with the long-run growth path if

The approach to understanding the determination of real GDP and the price level that emphasizes incomplete adjustment in the prices of many goods is

Suppose an economy originally in long-run equilibrium experiences a decrease in aggregate demand. According to the classical model