Exam 9: Classical Macroeconomics and the Self-Regulating Economy

Exhibit 9-4 -Refer to Exhibit 9-4.When AD and SRAS cross at point (P₁,Q₃),the economy is in

When consumers start to spend less and save more,classical macroeconomists believe that interest rates will then ______________ resulting in a(n)________________ in investment.

If the economy is self-regulating,then it follows that

If the economy is self-regulating and current Real GDP is greater than Natural Real GDP,the economy is operating __________ the natural unemployment rate and wages will soon __________.

In the classical view of the credit market,a rise in saving produces a rise in investment via a

Exhibit 9-3 -Refer to Exhibit 9-3.If the economy is in short-run equilibrium at point C,

If the current unemployment rate is less than the natural unemployment rate,then the economy is

Exhibit 9-6 -Refer to Exhibit 9-6.If the economy is self-regulating and currently at point 1,it follows that

Which of the following is not consistent with a self-regulating economy?

For saving to increase,consumption must decrease,ceteris paribus.

When the current state of the economy is such that Real GDP is greater than Natural Real GDP,the economy is in a(n)____________________ gap.In this situation,the (actual)unemployment rate is ___________ than the natural unemployment rate,and there is a ________________ in the labor market.

When the economy is in a recessionary gap,the labor market is experiencing a surplus.

The frictional unemployment rate is 2.5 percent,the structural unemployment rate is 3.1 percent,and the current unemployment rate (in the economy)is 5.6.The economy is in

When the economy is in a recessionary gap,the labor market is experiencing a _____________.In a self-regulating economy,wage rates will then ___________ and the ______________ curve will shift __________________.

If the structural unemployment rate is 3 percent,the frictional unemployment rate is 3 percent,and the current unemployment rate is 5 percent,then the economy is in a recessionary gap.

A necessary condition for the economy to be self-regulating is that

In a self-regulating economy,inflationary and recessionary gaps produce shifts of the

Exhibit 9-5 -Refer to Exhibit 9-5.Point A on graph (2)corresponds to which point(s)on graph (1)?

Describe the difference between business-cycle macroeconomics and economic-growth macroeconomics.

A person who believes the economy is self-regulating also believes that