Exam 11: Classical and Keynesian Macro Analyses

"Supply creates its own demand" is known as

The net effect of a stronger dollar on real GDP is

Suppose that last year $1 U.S. exchanged for 1.2 euros. If this year $1 exchanges for 1.1 euros, then we can conclude that

What is TRUE of the aggregate supply curve in the classical model?

One key assumption of the classical model is

The implication of Say's law is that

According to the circular flow of income and output, saving causes

Say's law implies that

Cost-push inflation is

Suppose the Chinese yuan increases in its value relative to the U.S. dollar. In the U.S. economy,

The classical model assumes that

"The level of employment in an economy determines its real GDP, other things held constant." Do you agree or disagree? Why? What assumptions are necessary for your conclusion based on the classical model?

The Keynesian short-run aggregate supply curve is horizontal because

-Refer to the above figure. Suppose the economy is at E. A stronger dollar leads to a lower real GDP. Which of the aggregate supply curves must be the relevant curve after the change in the value of the dollar?

A congressman states, "If a government attempts to increase employment through increased government spending, all we will end up with is a higher price level." This congressman assumes that the

The original Keynesian economic theory states that

The Keynesian model is basically

Refer to the above figure. Which point or points represent(s) a long-run equilibrium?

The classical model indicates that at the equilibrium interest rate, saving is

-Refer to the above figure. The classical aggregate supply curve is represented by ________ and the Keynesian short-run aggregate supply curve is represented by ________.