Exam 5: Introduction to Macroeconomics

The United States economy has yet to simultaneously experience high inflation and high unemployment.

Since 1970, the highest unemployment rate in the U.S was associated with the recession of

According to ________ models, the level of employment is determined primarily by prices and wages.

Inflation refers to a(n) ________ in the overall ________.

A period when the economy shrinks is known as

Contractionary fiscal policy includes raising taxes.

According to the Classical model, an excess supply of labor would drive up wages to a new equilibrium level and therefore unemployment would not persist.

In the circular flow diagram, firms ________ labor and households ________ goods and services.

Keynes believed that expansionary fiscal policy could help get an economy out of an inflation.

Refer to the information for this hypothetical economy provided in Table 5.2 below to answer the questions that follow. Table 5.2 2014 2015 2016 -Refer to Table 5.2. In this economy, a contraction existed around the

The period in the business cycle from a peak to a trough is a

Unemployment implies that in the labor market

Treasury bonds are ________ issued by the federal government when it borrows money.

A corporate bond is a promissory note issued by a firm when it borrows money.

An expansion is usually associated with rising price levels.

The demand for steel has decreased in July without any change in supply. Six months later there still has been no change in steel prices. This is an example of a

Macroeconomic policies became more influenced by Keynes' theories starting with,

In the circular flow diagram everyone's expenditure is someone else's cost.

The unemployment rate equals

The General Theory of Employment, Interest, and Money is an economic treatise written by