Econ201

Question 1

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:

Don't use plagiarized sources. Get Your Custom Essay on
Need an answer from similar question? You have just landed to the most confidential, trustful essay writing service to order the paper from.
Just from $11/Page
Order Now
a)  is producing at its potential GDP.

 

b)  is producing at its equilibrium point.

 

c)  is producing at a point where output is less than potential GDP.

 

d)  is producing at a point where output is more than potential GDP.

 

 

Question 2

In a Keynesian cross diagram, what name is given to the distance between an output level that is below potential GDP and the level of potential GDP?

Question 16 options:

a)  national income (Y)

 

b)  expenditure-output

 

c)  inflationary gap

 

d) recessionary gap

 

 

Question 3

 

Which of the following will cause the multiplier to be smaller and cause changes in investor confidence to have a smaller effect in an economy?

a)  decreased trade

 

b)  bigger leakages

 

c)  increased trade

 

d)  smaller leakages

 

 

Question 4

Aggregate demand is more likely to _________________ than aggregate supply in the short run.

a)  increase slightly

 

b) . decrease substantially

 

c)  shift substantially

 

d)  remain unchanged

 

 

Question 5

Keynesian economics focuses on explaining why recessions and depressions occur, as well as offering a ______________________ for minimizing their effects.

:

a)  policy prescription

 

b)  set of menu costs

 

c)  pricing strategy

 

d)  macro-economic model

 

 

Question 6

 

Which of the following is a distinguishing characteristic of a Keynesian cross diagram?

 

a)  45-degree line

 

b)  real GDP on the horizontal axis

 

c)  a flat line

 

d)  several different Phillips curves

 

 

Question 7

 

Which of the following data would be analyzed to determine whether any shift in the MPI has occurred over the course of the past 5 year period?

a)  interest rates

 

b)  exchange rates

 

c) MPS

 

d)  foreign income

 

 

Question 8

 

According to the _____________________ argument, a market-oriented economy has no obvious way to implement a plan of systematic wage reductions.

a)  sticky wage

 

b)  sticky wage and price

 

c)  coordination

 

d)  Keynesian