Aggregate Supply represents:
total expenditure in the economy
total production in the economy
total of all wages paid in the economy
a and b only
a, b, and c
Two other names for the LRAS is , .
An oil price decrease in the US should shift:
aggregate demand to the left
aggregate supply to the left
aggregate demand to the right
aggregate supply to the right
An oil price decrease in the US should increase prices and lower Real GPD.
An increase in the money supply would shift:
A government budget cut would shift:
aggregate supply yo the right
A government budget cut would:
increase prices and lower Real GDP
increase prices and raise Real GDP
decrease prices and lower Real GDP
decease prices and raise Real GDP
An increase in US imports would:
Increase prices and raise Real GDP
decrease prices and raise Real GDP
In a Classical view of the world, what factor makes savings equal to investment?
wages
interest rates
neither a or b
a and b together
Classical economists believe the government never should try to balance the economy, it is better left alone.
Say's Law is:
good money drives bad money out of the circulation
production creates the income necessary to buy everything produced
prices must adjust so that all goods produced are sold
equilibrium always exists
Classical economists believe that in the long run, whether or not there is unemployment is determined solely by aggregate supply, not aggregate demand.
If my wage was $10 per hour and bread cost $2.50 per loaf last month and this month my wage is $9 per month and bread costs $3 per loaf, my nominal wage has fallen and my real wage has risen.
was the person who believed that population growth would outpace the food supply.
A recessionary gap would be eliminated, according to Classical economists:
only through government spending and taxing changes
because wages fall, without any government spending action
because wages fall, caused by actions of the government
because wages rise, without any government action
Classical economists believed the economy would reach a "stationary state" in the long run.
Classical economics is based on the concept that markets always give the correct price and that they move to that price quickly.
Suppose my income this month is $8,000 and I spent $7,000, and last month my income was $6,000 and I spent $6,000. What is my MPC? My MPC is .
If my MPC is what you calculated previously, a &50 billion increase in government spending would cuase how big a change in GDP? $ B.
A recessionary gap would be eliminated, according to Keynesian economists:
only though government action
because wages fall, without any government action
To Keynes, the most common cause of recessions is not enough:
consumption
investment
savings
prices
According to Keynes, in the long run we are all .
According to Keynes, the most important determinant of investment is .
Keynes' other expression for the previous answer is .
In Keynes' view, savings and investment do not have to be equal, where in the Classical view they always were.
Keynes believed the Great Depression came about because:
wages did not fall far enough
wages did not fall fast enough
wages fell, but prices didn't
none of the above
Keynes' theory is based primarily around:
aggregate demand
aggregate supply
using both aggregate demand and aggregate supply together
2:30 in the afternoon
According to Keynes, the most important determinant of savings is .
According to the Classical Theory, savings and investments are determined by .
is the person who is thought of as the creator of supply side economics.
According to supply side theory, the Reagan and Bush tax cuts which targeted the rich will to the poor and middle class, helping everyone eventually.
One legacy of supply side economics is that we now care anout what variable in macroeconomics that we did not before?
nominal wages
worker productivity
taxes
According to your professor, John Lennon was killed by .
The equation of exchange is = .
is the person we associate with this equation in modern times.
The equation of exchange as interpreted by the person in the previous question says that increases in the money supply cause inflation and decrease in the money supply cause recessions.
The Neo-Classical is the bringing together of Classical and Keynesian theory into modern economic theories.
New Keynesian economists blame recessions on:
"sticky" wages and prices
lack of spending
supply shocks
effective demand failures
New Classical economists blame recessions on:
Ben Bernanke, former chair of the Federal Reserve, blames the 2007 recession om too much savings coming into the United States, mostly from China.
Both New Keynesians and New Classicals believe the economy works according to Classical theory in the long run.
Aggregate Demand is:
total consumer activity in the economy
both a and b
Keynesian economists believed that interest rates are determined by:
savings and investment
supply and demand for money
supply and demand for investment
money and savings
According to the Keynesians, the economy may be in disequiliribium.
The key to supply side economics is .
According to a Keynesian, _____ is the most volatile factor of the following:
Supply Side economics was correct in predicting that deregulation targeted at individual industries would improve the performance of the whole economy.
Most modern economists are:
New Monetarists
New Keynesians
New Classicals
New Orleans
The Laffer Curve says that there is a trade-off between inflation and unemployment.
New Classicals argue that new technologies destroy old jobs before they create many new jobs.
