Macro chapt 11+12

  1. If firms set prices and
    then keep them fixed for a period of time, their fixed prices imply that
    A) the aggregate price level is fixed and that aggregate demand determines the
    quantity of goods and services sold.
    B) prices are set by aggregate demand and supply.
    C) the aggregate price level adjusts continuously.
    D) the aggregate price level is fixed and that aggregate supply determines the
    quantity of goods and services sold.
    A
  2. The consumption function
    relates consumption expenditure to
    A) the interest
    rate.
    B) disposable income.
    C)
    saving.
    D) the price level.
    B
  3. The marginal propensity
    to consume



    C)
  4. If consumption
    expenditures for a household increase from $1000 to $1800 when disposable
    income rises from $1000 to $2000, the marginal propensity to consume is
    A)
    0.8.
    B) 0.5.
    C)
    0.3.
    D) 0.2.
    A
  5. If the marginal
    propensity to consume is 0.8, every $10 increase in disposable income increases




    A)
  6. If wealth increases, the consumption function
    A) shifts
    upward.
    B) shifts downward.
    C) is
    unaffected.
    D) has a steeper slope.
    A
  7. Read the two statements
    below and indicate if they are true or false. I. Autonomous expenditures change
    when GDP changes. II. Aggregate planned expenditure is the sum of planned
    consumption expenditure, investment, government purchases, and net exports.
    _______
    A) I and II are both
    true.
    B) I and II are both false.
    C) I is true and II is
    false
    D) I is false and II is true.
    D
  8. Autonomous expenditure
    is not influenced by



    GDP.
    D) any other variable.
    C)
  9. A decrease in
    autonomous consumption will



    C)
  10. When the economy is in
    equilibrium,



    A)
  11. The multiplier effect
    exists because a change in autonomous expenditure



    B)
  12. AThe larger the MPC, the




    D)
  13. If investment increases
    by $300 and, in response, equilibrium aggregate expenditure increases by $600,
    the multiplier is
    A)
    0.2.
    B)
    0.5.
    C) 2.
    D) 5.
    C
  14. Suppose that the MPC =
    0.75 and there are no taxes or imports. Then a $100 decrease in autonomous
    spending causes equilibrium expenditure to
    A) decrease by
    $400.
    B) increase by $400.
    C) decrease by
    $750.
    D) increase by $750.
    A
  15. Consumption expenditure:
    C = 8 + 0.7Y
    Investment: I = 5
    Government purchases: G = 7
    Exports: X = 10
    Imports: M= 0.2Y

    The equations above
    describe the economy of La La Land. What is the equation for the aggregate
    expenditure curve?
    A) AE = 13 +
    0.5Y
    B) AE = 30 - 0.5Y
    C) AE = 30 +
    0.5Y
    D) AE = 30 + 0.9Y
    C
  16. The marginal propensity
    to import is the ________ that is spent on imports.



    B)
  17. MISSED PROBLEMS CHAPTER 11: 3,4,13,14,15,16,21,22,23
  18. If the economy
    experiences inflation,




    rate.
    C)
  19. Inflation can be
    described as



    A)
  20. When aggregate demand
    persistently grows at a rate that exceeds the growth rate of potential GDP, the
    economy will experience ________.



    D)
  21. Demand-pull inflation
    starts with



    B)
  22. An increase in ________
    could start a demand-pull inflation?



    D)
  23. Increases in the
    quantity of money can start a ________ inflation and an increase in government
    expenditure can start a ________ inflation.



    A)
  24. Initially, demand-pull
    inflation will



    B)
  25. A demand-pull inflation
    can be described as ________ shifts in the AD curve and ________ shifts in the
    SAS curve.



    A)
  26. As the money wage rate
    rises,
    A) the long-run aggregate supply curve shifts rightward.
    B) the short-run aggregate supply curve shifts rightward.
    C) both the long-run aggregate supply curve and the short-run aggregate supply
    curve shift leftward.
    D) the short-run aggregate supply curve shifts leftward.
    D
  27. The main sources of
    cost-push inflation are increases in



    A)
  28. Cost-push inflation can
    start with



    A)
  29. A one-time increase in
    oil prices without any following change in aggregate demand produces



    the price level.
    D) a one-time fall in the price level.
    C)
  30. Stagflation occurs when
    the price level ________ and real GDP ________.



    B)
  31. For a cost-push
    inflation to occur, oil price increases must be accompanied by



    B)
  32. In a demand-pull
    inflation, the AD curve shifts ________ and the SAS curve shifts ________.



    C)
  33. The Phillips curve
    shows the relationship between the



    A)
  34. A Phillips curve shows
    the relationship between the



    C)
  35. The short-run Phillips
    curve



    C)
  36. An increase in the
    expected inflation rate shifts the



    D)
  37. The long-run Phillips
    curve



    B)
  38. The short-run Phillips
    curve intersects the long-run Phillips curve at the



    C)
  39. In the above figure, suppose
    that the economy currently is at point A. If the inflation rate rises and this
    rise is NOT anticipated by the public, the economy moves to a point such as
    point



    B)
  40. The short-run Phillips
    curve shows the ________ relationship between ________.



    C)
  41. A decrease in the
    expected inflation rate leads to ________ in the long-run Phillips curve and
    ________ in the short-run Phillips curve.



    D)
  42. The long-run Phillips
    curve is ________.



    C)
  43. According to ________
    the business cycle is the result of shifts in the economy's AD curve.



    D)
  44. Keynes used the term
    "animal spirits" to refer to the



    C)
  45. In monetarist business
    cycle theory, increases in money growth temporarily ________ real GDP and
    ________ the price level.



    A)
  46. MISSED CHAPTER 12: 8,23
Author
Dorky48
ID
151061
Card Set
Macro chapt 11+12
Description
Macro final
Updated